Hanjin Closing European Operations
Drip, drip, drip… You can just hear the sounds of liquidation.
It’s still possible that Hanjin could survive as a small carrier in South Korea, but it’s looking more and more like the once major but now bankrupt shipping company will be completely liquidated, as most believe the carrier’s fate to be.
The most recent step toward liquidation hitting the news is Hanjin’s closing of European operations.
The Wall Street Journal reported yesterday:
Hanjin, South Korea’s largest shipping company, has so far obtained approval from the Seoul Central District Court to close eight of its 10 business operations in Europe, including its regional headquarters in Germany, according to a company spokeswoman.
The remaining two branch offices will also be eventually closed, a court judge said.
“The company’s European route services have completely halted,” Hanjin said in a regulatory filing.
This story of the closing of Hanjin’s European operations comes hot on the heals of another article from Wall Street Journal reporting that Hanjin is working on selling it stake in Total Terminals International (TTI) at the Port of Long Beach:
Korea’s Hanjin Shipping Co. is in talks with Swiss shipping giant Mediterranean Shipping Co. to sell its stake in the Long Beach Terminal as part of a plan to dispose most of its overseas assets after filing for bankruptcy protection in August, people involved in the matter said Friday.
The talks involve Hanjin’s 54% stake in Total Terminals International LLC, which runs Long Beach Terminal in California. MSC owns the remaining 46%.
The deal could be very tempting for MSC, as it would make TTI completely an MSC terminal.
At least that terminal deal would have Hanjin bringing in money. Shutting down European operations doesn’t bring in any cash. However, it will reduce the money bleeding from the company, which saw its shipments stop upon filing for receivership in Seoul’s bankruptcy court.
Still, European operations are yet another bad sign for Hanjin. As if signs are needed to see that things are bad for Hanjin.
Francesca Washtell reported on City A.M. that Hanjin’s stocks plummeted upon the announcement that European operations would be closing:
Shares in South Korean freight giant Hanjin Shipping have dived almost 12 per cent this morning after the company announced it plans to shut its European business.
Hanjin’s stock was trading down 11.8 per cent to 1,005 won this morning.
You would expect Hanjin’s stock to have done nothing but fall since the company entered receivership; however, Hanjin stocks did jump up upon the announcement a couple weeks ago that Hanjin was putting its Asia-U.S. assets up for sale.
Piece by piece, Hanjin is being dismantled as its assets and operations are melting away. The company still does have a chance at survival if it can turn a rehabilitation plan into the court and get it approved. Few, however, believe Hanjin will be successful in that. Drip, drip, drip…