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Hanjin Shipping to wind down Europe business as demand slumps
[SINGAPORE] Hanjin Shipping Co, South Korea's largest container line that has already put its Asia-US business on sale after filing for bankruptcy protection late August, will wind down its European business as demand for its services on the Asia-Europe trade lane slumped.
Hanjin will close all its 10 branches in Europe, including its regional headquarters in Germany, the container line's spokeswoman said Monday. The Seoul-based company expects to start the process as early as this week after obtaining approval from the Seoul Central District Court, she said.
The decision to shut down its Europe business is part of the breakup process of Hanjin kicked off by the Seoul court, which earlier said it would consider selling the company entirely. Hanjin is also seeking separate bids from shipping companies to buy its Asia-US network as well as the investment in a terminal in Long Beach, California.
Shares of Hanjin fell as much as 14 per cent to 982 won, the lowest intraday price since Sept 27, and traded at 1,010 won as of 10:07am in Seoul. The stock is the second-worst performer on the benchmark Kospi index Monday.
The Seoul Central District Court is receiving initial bids for the marketing network of Hanjin's Asia-US operations by the end of this week and expects to sign an agreement by mid-November in efforts to raise funds for the indebted company. The South Korean company is also in talks to sell its 54 per cent stake in the Long Beach port container terminal.
The South Korean shipping company filed for court receivership as losses piled up after a global slowdown in trade and excess capacity depressed freight rates.
Creditors decided to halt all financial support to Hanjin in August, causing its box carriers to be stranded at sea and disrupting the global supply chain ahead of the year-end holiday season. On the court's advice, Hanjin has been returning vessels to owners as soon as they are unloaded.
Of the 97 container vessels it operated, unloading of cargo from 79 ships have been completed as of Oct 20, according to Hanjin's website.