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HMM in talks to join 2M alliance

HMM in talks to join 2M alliance

South Korea’s shipping line Hyundai Merchant Marine (HMM) has reportedly announced that it is in talks to join the 2M alliance.

The shipping line, which has been financially struggling for several years, entered negotiations to join the alliance comprising shipping giants Maersk and the Mediterranean Shipping Company (MSC), the Wall Street Journal (WSJ) reported.

HMM was recently unexpectedly left out of the newly-created “THE Alliance”, which was established in May 2016 and feature HMM’s South Korean competitor Hanjin, Hapag-Lloyd, ‘K’ Line, Mitsui O.S.K. Lines (MOL), Nippon Yusen Kaisha (NYK) Line and Yang Ming.

HMM reportedly said in a statement: “2M has wanted to enhance its influence in the Asian region. And we want to raise our presence in Asia-U.S. routes. Both sides will benefit from a successful deal.”

In May 2016, the shipping line’s lead creditor Korean Development Bank (KDB) announced that the company’s creditors agreed to swap 680bn won (US$573m) of debt for equity.

However, one of the conditions of the agreement was that HMM joined an alliance of major shipping companies.

This move would take the company’s debts, which totaled 5,2tn won (US$4.3bn) at the end of the first quarter of 2016, to around 4.52tn won (US$3.8bn), representing a 13% decrease.

As part of the agreement, creditors would receive a stake in the business in return.