[Photo by Namkung Jinwoong = timeid@ajunews.com]
Hyundai Merchant & Marine will be allowed to acquire some prime assets from Hanjin Shipping to maintain the competitiveness of South Korea's embattled shipping industry, officials said Wednesday after the country's largest container carrier applied for court receivership.
Hyundai Merchant shares jumped 25.6 percent to 9,330 won (8.34 US dollars) as of 3:20 pm (0620 GMT) after The Korea Financial Services Commission (FSC) suggested that the country's second largest container carrier could purchase healthy assets from Hyundai Shipping such as ships, sales networks, and workforce.
Hyundai Merchant has been separated from its parent Hyundai group for its rehabilitation under creditor-led corporate restructuring.
"Due to Hanjin Shipping's court receivership, there are worries that shipping, one of our key industries, will lose its competitiveness. To prevent such a situation, we will actively push for Hyundai Merchant to acquire Hanjin Shipping's healthy assets such as ships, manpower, marketing, and networks," FSC vice chairman Jung Eun-bo said.
Hanjin Shipping has already transferred core assets to Hanjin Group units, but there are valuable assets still left intact, he said.
Jung also said South Korea's financial markets are strong enough to bear the impact of Hanjin Shipping's court receivership.
"There won't be much pressure on financial institutions" which have accumulated loan loss provisions estimated at 949 billion won (848 million US dollars), he, adding additional loan loss provisions would be about 285 billion won. Corporate bonds owned by individual investors are worth 64.5 billion won.
Aju News Park Sae-jin = swatchsjp@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
