Seoul: Hanjin Shipping is to increase the prominence of its dry bulk activities by absorbing a subsidiary and ordering new vessels, the company announced at its Board meeting yesterday. Hanjin plans to merge with Keoyang Shipping, which specialises in dry bulk transportation of iron ore and coal for POSCO, KEPCO and their affiliated companies. If approved by shareholders, Hanjin Shipping will take over Keoyang Shipping's total owned fleet of 17 dry bulk vessels.
Hanjin Shipping states, "The main reason for this merger is to avoid the overlap of the bulk business run by Keoyang Shipping and Hanjin Shipping and eventually to improve the efficiency of the management and bring synergy effect to the business." The company hopes that the move will also serve to enhance its bulk business with relatively stable profitability. The dry bulk sector currently accounts for around 20% of the company's total sales.
The matter will be put to a vote by shareholders at a meeting on May 29, 2008 at which shareholders who oppose the resolution can exercise the appraisal rights of dissenting shareholders. Hanjin Shipping has proposed a transaction of 0.4550678 Hanjin Shipping share for each Keoyang share owned.
In 2007 Keoyang Shipping's total sales recorded KRW 140.2bn ($142m), with operating profit of KRW 24.8bn, and net profit of KRW 20bn. Its total asset reached KRW 338.9bn, and liability ratio, 35% as of 2007.
Hanjin Shipping has also announced plans to expand its bulk fleet, from about 100 vessels to 250 by 2013. Some 250 vessels will be secured in near future, including 16 dry bulk ships - of which 10 ordered by Hanjin Shipping and six ordered by Keoyang Shipping (including two very large dry bulk vessels of 300,000 ton). [15/04/08]
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