- Creditors are pressuring Hanjin Shipping to sell its stake in Total Terminals International, which operates a terminal at the Port of Long Beach, Business Korea reported Tuesday.
- An earlier decision by a bankruptcy court in South Korea provided Korea Line with right of first refusal on the purchase, but Hyundai Merchant Marine and Mediterranean Shipping Company placed a joint bid after Korea Line deferred the decision to purchase.
- A Chapter 15 filing was initially requested in September due to the pending nature of Hanjin's bankruptcy proceedings overseas. However, since Hanjin's TTI subsidiary is domestic, Chapter 15 will likely be halted in favor of Chapter 11 proceedings if it gets to that point, according to one industry expert.
Korea Line's surprise decision to defer purchase of Hanjin's TTI stake opened the door for other competitors to bid for the coveted Long Beach terminal. But the decision maker is Korea Line, not Hanjin.
In effect, creditors are asking Hanjin to pressure Korea Line to buy or refuse before that date, so Hanjin could consider the other offers and avoid a Chapter 11 filing. The HMM-MSC offer includes a debt buyout that may be beneficial for creditors, and may be a reason to instill additional pressure on Korea Line.
Korea Line, meanwhile, must consider whether the purchase of the terminal aligns with its goals. The Port of Long Beach boasts some of the highest container traffic among U.S. ports, but the outlook for terminals is not looking great as carrier consolidation reduces operators' pricing leverage. HMM and MSC, meanwhile, are part of this industry consolidation and would doubly benefit from the changing dynamics.