Hahn targets Hanjin bulk

Private equity investor Hahn & Co is being tipped as the buyer of Hanjin Shipping’s dry bulk business in a KRW 1.3 trillion ($1.2bn) deal.
Hanjin dry bulk is for sale.

Hanjin dry bulk is for sale.

The acquisition is expected to be concluded early next week and comes as part of an extensive restructuring plan to save financially troubled Hanjin, a part of the Korean Air (KAL) group.

Hanjin is reportedly hoping to raise a total of KRW 1.9 trillion through both asset sales and taking on fresh loans to help restore its balance sheet back to profit.

Hanjin owns a fleet of 50 bulk carriers ranging in size between handysize bulkers and very large ore carriers. But the big attraction of the dry bulk deal to buyers is said to be the profitable long term freight contracts which the company holds with domestic power companies Kepco and KOGAS.

The upturn in the dry bulk market and improved prospects for the market are understood to have helped progress a deal with Hahn & Co.

Hahn & Co, established by former Morgan Stanley chief investment officer Scott Hahn, has shown a strong interest in shipping and had earlier made a failed bid to buy a controlling stake in Korea Line.

KAL has said it will support Hanjin through its problems and is set to be an integral part of its financial restructuring. KAL has said it will sell most of its 28% stake in S Oil but is lining up a KRW 650bn injection of fresh liquidity into Hanjin made up of a KRW 250bn in loans and the rest through the acquisition of a rights offering which will see KAL emerge as Hanjin’s majority shareholder.

Hanjin is also lining up a KRW 300bn syndicated loan from banks to improve its liquidity further.