Korea’s second-largest shipper
Hyundai Merchant Marine will be off to a fresh start as a subsidiary of the Korea Development Bank, ending the 40-year-long ties with conglomerate Hyundai Group after struggling the restructuring plan.
Having the largest shareholder change from Hyundai Group to the state-run policy bank, the shipper will list the new stocks on Friday, after wrapping up the months-long restructuring plans.
Last month, Hyundai Group lost control over the shipper as the shareholders approved the seven-to-one reduction of capital owned by group chairwoman Hyun Jeong-eun and affiliates.
Since March, the company strived to fulfill the conditions requested by the creditors to normalize the business. The KDB and other creditors had promised debt-to-equity swap if the shipper meets all the conditions.
This includes changing the charter cost, rescheduling the debt rate and joining the 2M alliance -- the vessel sharing partnership founded by Maersk and MSC -- from April next year.
Founded in 1976 with only three deserted oil tankers, Hyundai Marchant Marine quickly expanded under late Hyundai Group founder Jung Ju-yung’s leadership, growing to be the world’s No. 8 shipper in the late 1990s.
The company, however, was struck with the plummeting shipping cost from the 2008 financial crisis, suffering long-term business challenges, which led to the large-scale restructuring plan.
To better normalize the business, the creditors are currently looking for a new leader, with several figures mentioned, according to sources.
Possible candidates include Incheon Port Authority CEO Yoo Chang-keun, a shipping expert who once worked at Hyundai Merchant Marine as a high-ranking official, and former Hyundai Merchant Marine CEO Noh Jeong-ik, who served as the shipper’s head from 2002 to 2008.
Some, however, reportedly expressed opposition to the Yoo and Noh as they cannot stay free from the accountability for the shipper’s financial crisis. The creditors also reportedly ruled out figures involved with the company’s crisis.
Speculation has also grown that a foreign expert might also be likely, with Ron Widdows being considered.
Widdows, who currently serves as the principal of Ronald D. Widdows & Assocites Pte Ltd., has over 40 years of experience in the container shipping sector, with the majority of his time being spent as the head of international container shipping company APL and its parent company Neptune Orient Lines.
“For now, it is too hasty to say that any one of the candidates is likely to be tapped. But it is sure that the creditors are attempting to carefully make the choice,” sources said.
By Lee Hyun-jeong (
rene@heraldcorp.com)
