While many might have felt that Hyundai Merchant Marine’s (HMM) exclusion from today’s big box news, the creation of THE Alliance, might have been a final nail in the coffin for the embattled line, its largest creditor has swiftly come out to say it will continue to support the carrier.
HMM was not one of the six names behind THE Alliance, leading some to speculate that it would struggle to remain competitive on the main east-west trades. However, the line says it is in discussions with the six firms that make up THE Alliance (MOL, K Line, NYK, Yang Ming, Hanjin and Hapag Lloyd) with a view to joining later this year once it has got its finances in better shape.
More importantly for the immediate future of HMM, suffering from debts in excess of $5bn and urgent repayments pending, Korea Development Bank (KDB) came out today in full support of the carrier.
“Normalization of HMM’s business, including charter negotiations and debt adjustment, is expected to be concluded by the end of May. KDB believes that HMM will be able to enter The Alliance once the company’s financial condition is stabilized by dramatically bringing down its debt ratio to 200 percent-level. In addition, KDB will provide all necessary supports to HMM over the course of the company’s continued efforts to normalize its business,” the bank said in a statement.
THE Alliance was officially unveiled today, essentially hooking up the rumps of the G6 and CKYHE alliances in the wake of another new formation, the Ocean Alliance (comprising CMA CGM, China Cosco Shipping, Evergreen and OOCL), being announced last month.
