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Hyundai merchant surges after liner said to assess Hanjin assets
[SEOUL] Hyundai Merchant Marine Co, South Korea's second-largest container line, surged in Seoul trading after the company started looking at some of the assets of troubled rival Hanjin Shipping Co. for a possible acquisition.
The stock jumped as much as 12 per cent to 9,190 won, the highest intraday level since Sept 8, helping trim the declines this year to 70 per cent. Hanjin shares declined as much as 8.4 per cent.
Financial institutions that provided money to Hanjin specifically to buy carriers have approached Hyundai Merchant for sale of its vessels, mostly container ships, people with direct knowledge of the matter said, asking not to be identified, as the talks are private.
The Korea Development Bank - the largest shareholder of Hyundai Merchant and the biggest lender to Hanjin - and the Seoul Central District Court have been pushing to find a solution to the troubles at Hanjin, whose filing for bankruptcy protection last month has roiled the global supply-chain industry.
"Hanjin Shipping selling assets will put a dent to its competitiveness," said Cho Byung Hee, an analyst at Kiwoom Securities Co in Seoul.
"This means the scope of their business is going to shrink from what have now."
Creditors and owners are stepping up efforts to help ease cargo disruptions resulting from boxes stuck on stranded ships.
Last week, KDB said it will offer a credit line of 50 billion won (S$61.19 million) to Hanjin Shipping if funds previously pledged by the owners are insufficient to ease the situation.