Hanjin Sells Stake in Terminal at Port of Lengthy Seashore to MSC

In one other transfer of liquidation after chapter, Hanjin is promoting its stake in Whole Terminals Worldwide (TTI) to Mediterranean Transport Co (MSC).

Chris Dupin experiences in an American Shipper article:

Hanjin Transport has signed a deal to promote its stake in Whole Terminals Worldwide (TTI) to Terminal Funding Ltd. (TIL), an organization owned in substantial half by Mediterranean Transport Co (MSC).

The deal was authorised Tuesday by a Seoul District Courtroom…

If this deal can be authorised by U.S. authorities, it’s going to give MSC full management of the container terminal by way of TIL, as the corporate already owns the rest of the shares in TTI.

Hyundai Service provider Marine (HMM) is additionally a participant within the sale of the shares regardless of what superficial readings of headlines on the subject would lead one to consider.

At first look, it may appear odd to learn issues like “… Hyundai Service provider Marine Co. had indicated that it will be prepared to enter right into a joint bid with MSC to accumulate the terminals, nevertheless it dropped out of the method final week,” as reported in a Transport Matters article, after which see Dupin’s article spotlight HMM as working with MSC on the deal:

Joe Cook dinner, international advertising director for MSC, mentioned Hanjin, TIL and Korean liner service Hyundai Service provider Marine “are progressing approvals for completion of a purchase order and sale settlement associated to the Hanjin pursuits in TTI. The events count on that each one approvals shall be achieved by early January 2017. As beforehand reported, our bid might be thought of to be joint with HMM and they’re going to purchase an curiosity within the terminal too.”

Statements like MSC’s, saying this may be seen as a three way partnership between the delivery corporations, and the truth that it’s a solo shopping for deal from MSC that’s going by way of the approval course of appear contradictory. However right here’s what’s at play:

HMM’s monetary troubles have been nicely documented. In truth, this summer season it seemed like HMM was the extra doubtless South Korean delivery firm to file for chapter earlier than Hanjin collapsed. It will be fairly the understatement to say HMM doesn’t have one of the best credit score. That triggered the delivery firm to drop out of the joint bid it was making with MSC to purchase the shares of TTI.

That didn’t imply HMM not wished to accumulate shares nor that MSC was not focused on working with the South Korean delivery firm within the acquisition of the shares from Hanjin.

HMM’s monetary and credit score state of affairs merely modified the construction of how the businesses are working collectively to accumulate the container terminal shares.

In a Wall Road Journal article, In-Soo Nam shared HMM Chief Govt C.Okay. Yoo phrases to the information outlet on the topic:

“Contemplating our low credit score scores, we thought it will be higher for MSC to make a solo bid. We agreed to purchase a stake from MSC later.”

The delivery firm additionally clarified the state of affairs with the Journal of Commerce (JOC), as highlighted in an article written by Turloch Mooney:

“HMM and MSC have agreed to hitch forces to accumulate Hanjin Transport’s pursuits in TTI. Though MSC made a sole bid because of HMM’s low credit standing, the shares of TTI shall be collectively acquired,” an HMM spokesperson advised JOC.com.

It’s clear that MSC is shopping for Hanjin’s stake in TTI with the intention of promoting a few of these shares to HMM. What isn’t clear is what number of shares MSC plans to promote to HMM. Nobody, nonetheless, would count on it to be greater than a minority share.

Nonetheless, MSC may resolve to maintain the 100% share possession if it so selected.

Most see Hanjin’s promoting of its stake in TTI as one other step towards whole liquidation slightly than reorganization.

TTI not solely has a terminal within the Port of Lengthy Seashore, but additionally within the Port of Seattle. Right here is a bit more about TTI from its profile on the corporate’s web site:

Whole Terminals, established in 1991 is a full service marine terminal and stevedore operator alongside the U.S. West Coast. TTI operates two services in Lengthy Seashore and Seattle comprising a complete of 460 acres of terminal acreage. Company headquarters for TTI is situated in Lengthy Seashore, CA with satellite tv for pc workplaces in Seal Seashore, CA Chandler, AZ and Seattle, WA.