By Nam Hyun-woo
Hyundai Merchant Marine (HMM) said Friday it is set to buy a terminal in Spain owned by its ailing peer Hanjin Shipping.
The shipping line said that it was selected as a preferred bidder in the sale of Total Terminals International Algeciras (TTI Algeciras). Should the shipper strike a deal, it will be allowed to operate the terminal until July, 2040, when the contract with the port authority expires.
TTI Algeciras is the second largest terminal at the Port of Algeciras in Andalusia. A consortium between IBK Securities and Korea Investment Partners holds a 75 percent stake in the terminal and the rest is owned by Hanjin Shipping.
Hanjin Shipping initially had a 100 percent stake in the terminal after the port authority awarded a concession to build and operate it. However, it sold its stake to the consortium as part of restructuring efforts.
A special purpose company, named Algeciras Terminal Investment, will sell the consortium’s stake, and with a tag-along right, the second largest shareholder Hanjin will sell its stake at the same price, according to HMM.
Opening in May 2010, the terminal lies on a total area of 357,750 square meters and can handle up to 1.86 million TEUs annually. Global shipping lines, including Maersk, CMA-CGM, COSCO Shipping, Mitsui O.S.K. Lines and K-Line use the terminal.
According to Digital Strait, a Spanish maritime media outlet, Hanjin Shipping accounted for 16 percent of TTI Algeciras’ traffic in the first half of 2016. After Hanjin filed bankruptcy, the terminal removed all logos and emblems of Hanjin.
“The terminal has a significant strategic importance, because it is located at the crossing point of the Europe-South America line and Asia-North America line,” said an HMM official. “Also it is close to the new emerging market of North Africa, the acquisition will contribute to enhancing HMM’s mid- and long-term competitiveness.”
Currently, HMM owns California United Terminals and Washington United Terminals in the U.S., and Kaohsiung Hyundai Terminal in Taiwan. It also holds a 20 percent stake in the Rotterdam World Gateway in the Netherlands.
With HMM acquiring Hanjin’s assets, the terminal will be the fourth in its possession.
On Nov. 28, HMM will conduct due diligence for two to three weeks and will sign the deal at the end of next month.
Both HMM and Hanjin Shipping went through a government-led debt restructuring scheme. While HMM managed to get back on track after charter cost deals, Hanjin has fallen into court receivership, selling its assets including the terminal and vessels.