SEOUL South Korea's Hanjin Shipping Co Ltd is selling major businesses, including its Asia to U.S. route network, and will receive letters of intent by Oct. 28, the company said on Thursday.
The sale comes as creditors line up claims less than two months after the company applied for court receivership as the first major shipping line to be dragged down by global industry overcapacity and comparatively low freight rates. The firm had total debt of 6.03 trillion won ($5.41 billion) as of the end of June, according to its court filing.
Hanjin Shipping received court approval to seek buyers for assets in order to pay back creditors now in the process of making claims until Oct. 25. Its container ship capacity had shrunk to 17th place in global rankings as of Oct. 9, according to shipping data provider Alphaliner.
A spokesman for the Seoul Central District Court overseeing Hanjin Shipping's receivership said assets currently set to be put up for sale include the entire operations of Hanjin Shipping's U.S. to Asia routes such as manpower systems, five container ships, and 10 overseas businesses.
He declined to comment on the potential price or interested parties for the assets.
The Port of Long Beach said Wednesday that container volumes in September fell 16.6 percent from a year ago, as the effects of the Hanjin bankruptcy reached West Coast ports.
Hanjin Shipping accounted for approximately 12.3 percent of the port’s total containerised volume, it said.
A spokesman for shipper Hyundai Merchant Marine (HMM) declined to comment on whether it is interested in any of the assets to be sold until HMM has reviewed the assets on the block.
Hanjin Shipping shares closed up 30 percent on hopes for the asset sales. Until Wednesday, the stock had tumbled about 34 percent since late August.
(Reporting by Joyce Lee; Additional reporting by Hyunjoo Jin in SEOUL and Keith Wallis in SINGAPORE; Editing by Kenneth Maxwell and Christian Schmollinger)