South Korea’s leading container carrier Hyundai Merchant Marine Co. bought back interest in Hyundai Pusan New-Port Terminal Co. in southern coastal city of Busan a year after it had to sell its stake because of liquidity crunch.
The carrier said on Tuesday it signed a multi-party basic agreement to jointly operate Hyundai Pusan New-Port Terminal with the Port of Singapore Authority (PSA). Hyundai Merchant Marine that holds a 50 percent stake will name a chief executive, while PSA with the other 50 percent interest will appoint a chief financial officer.
In addition, the Busan Port Authorities agreed to support Hyundai Merchant Marine and PSA in their terminal operation, while the two firms will fully cooperate with the policy of the pot authorities to help make the port competitive against its global rivals.
Under the agreement, Hyundai Merchant Marine bought back a 40 percent share in the terminal from special-purpose company Waska, Inc., raising its interest to 50 percent, while PSA acquired additional 10 percent interest from Waska to tie with its JV partner.
The re-purchase is expected to boost Hyundai Merchant Marine’s shipping business with a home port in place in Busan, allowing it to significantly reduce high port handling fees.
Hyundai Merchant Marine is also weighing investments in major ports overseas. It currently owns a 20 percent interest in US Long Beach and Seattle terminals each. The company fully owns the Kaohsiung Terminal in Taiwan and the WUT in the US.
In a separate filing on Tuesday, Hyundai Merchant Marine announced that its first-quarter consolidated operating loss widened by 38.9 billion won on year to 170.1 billion on sales of 1.11 trillion won, down 14.7 percent over the same three-month period ended March. That represents the carrier’s 12th consecutive quarterly operating loss from the second quarter of 2015.
By Moon Ji-woong and Minu Kim
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