Hanjin Shipping Co., won approval from a court to wind down its European operations as demand for its services to the continent slumped, reports Bloomberg.
The judge overseeing Hanjin’s receivership at the Seoul Central District Court, approved the firm’s request, a court spokesman said. Hanjin will close all its 10 branches in Europe, including its regional headquarters in Germany, the container line’s spokeswoman said separately on Monday 24 Oct. The Seoul-based company expects to start the process as early as this week, she said.
The decision to shut down its Europe business is part of the breakup process of Hanjin, kicked off by the Seoul court, which earlier said it would consider selling the company entirely. Hanjin is also seeking separate bids for its Asia-U.S. network, as well as the investment in a terminal in Long Beach, California. The closure may benefit bigger rivals, such as A.P. Moeller-Maersk A/S and CMA CGM SA, as competition eases on one of the world’s biggest trade lanes.
“The biggest shipping lines will be the biggest gainers because they have the ability to move in much faster,” said Rahul Kapoor, a director at Drewry Financial Research Services Ltd. in Singapore. “The European lines like Maersk Line have already moved in to increase market share and they will continue to do so.”
The court is receiving initial bids for the marketing network of Hanjin’s Asia-U.S. operations by the end of this week, and expects to sign an agreement by mid-November in efforts to raise funds for the indebted company. The South Korean company is also in talks to sell its 54 percent stake in the Long Beach port container terminal .