The debt-laden South Korean carrier is to sell part of its dry bulk and liquefied natural gas fleet to a compatriot private equity firm in a bid to improve its balance sheet. Hanjin will set up an entity named Korea Bulk Shipping, controlling 29 bulkers and seven LNG carriers now owned by Hanjin.
The vessels, attached to contracts with Posco, Korea Electric Power, Hyundai Glovis and Korea Gas, are expected to bring in long-term income but are also laden with debt. Hanjin, which was profitable in only three of the 19 quarters since 2009, is saddled with debts and struggling to improve its liquidity.
The latest deal is part of the carrier’s plan to raise funds via asset sales, loan and equity financing to repay a proportion of its debt due next year. The final conditions are subject to agreement by shareholders. The company has also signed two consecutive voyage contracts with Korea Southern Power, one for 10 years and the other for 15 years. Hanjin will deploy two capesize bulkers to carry 2.5m tonnes of coal per annum from the second half of 2016.