Hanjin Shipping secures $298m on dry bulk spin-off completion

The completed deal now sees Hanjin Shipping and private equity firm Hahn & Company take shares of 22.2% and 77.8%, respectively, in the newly spun-off joint venture firm H-Line Shipping Co.

Hanjin Shipping contributed 36 ships including seven LNG vessels to H-Line Shipping and Hahn & Company took Hanjin Shipping’s shares of the joint venture which is worth KRW300bn, at the same time investing KRW100bn into the joint venture.

The joint venture company will take over Hanjin Shipping’s dedicated dry bulk business service for Posco, Kepco, Glovis and Kogas, along with all the assets, debts and related contracts, Hanjin Shipping said.

“By spinning off its dedicated dry bulk business, Hanjin Shipping secures KRW300bn and its debt-to-equity ratio and financial structure will improve as ship finance and debt worth KRW1.3trn is transferred to the joint venture,” Hanjin Shipping said.

Hanjin Shipping announced the dry bulk spin-off plan back in December 2013. The shipowner is struggling financially and it sank deeper into the red with a loss of KRW224.5bn in the first quarter, widening from a deficit of KRW34.7bn a year ago.