South Korean Hyundai Merchant Marine (HMM) has decided to sell its shares in the Hyudai Pusan New-Port Terminal, located in Busan, in order to diminish its debts. The company owns 50 percent plus one stake in the port terminal and it intends to sell 40 percent plus one share to the Port of Singapore Authority (PSA) for US$ 85.7 million.
HMM and the PSA were expected to sign the contract on March 23 after the Busan Port Authority gave its approval before.
Additionally, the shipping company has launched a self-rescue plan in order to avoid bankruptcy. The plan involves a partnership with its creditors, expecting that they decide in favor of the company and lighten the burden of debts.
According to sources, the Korean Minister of Oceans and Fisheries (MOF) Kim Young-suk advised the company not to merge with Hanjin Shipping as he told “would be a huge loss for the Korean shipping industry if we lose one of them that has maintained its hard-won membership.”
The state-owned Korea Development Bank (KBD) accepted to enter into a three-month maturity extension on HMM's loans. This was after the creditor gave a negative answer to HMM's plan for delay debts payment.
HMM loans total US$334 million maturing in 2016 and US$ 530 million in 2017. It is on the course to report five consecutive years of operating losses.