Drewry: HMM, Hanjin near merger, but insiders say too much overlap
Time：2016-03-10
Browse：82
But Singapore`s Splash 24/7 and IHS Media quote HMM sources dismissing merger speculation as a "half-baked rumour" and as an idea it has "little synergy due to their overlapping business fields".
Entitled Hyundai Merchant Marine ?"How Will the Endgame Play Out??the Drewry study outlines HMM`s predicament and various attempts to stay afloat, concluding merger with Hanjin is the best bet.
HMM is on course to report five consecutive years of operating losses when it releases its full-year 2015 financial results, notes the UK`s Port Technology.
The accumulated losses in its container division alone since 2008 to nine months of 2015 amount to US$352 million.
As the company sells off non-core assets, the container division is growing in importance; container sales now account for 75 per cent of HMM revenue, up from 33 per cent 2008.
Drewry believes that the increasing reliance on the container sector puts HMM in a tough spot as the near-term outlook for the industry is negative and expects the industry to lose in the region of $5 billion in 2016 ?meaning that the company will have to consider all options, including a merger with Hanjin.
Previous merger talks between HMM and Hanjin were put to rest by the Korean government last year, but the debt situation in both companies is causing serious concern in local circles and could well bring them back to the table.