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Distancing emphasised between Heung-A Line and troubled former parent

The Korea Shipowners’ Association has issued a statement to reassure the market that Heung-A Shipping’s debt restructuring has nothing to do with the liner operator Heung-A Line.

In December 2019, the ailing Heung-A Shipping sold its container liner operations to compatriot peer Sinokor Merchant Marine, whose CEO, Chung Tae-soon, is also the current chairman of the Korea Shipowners’ Association. Heung-A Line operates ships aggregating 31,282TEU, including nine owned vessels.

Selling off the container unit left Heung-A Shipping with its chemical tanker operations, but did little to improve its balance sheet, with total liabilities of US$360 million at end-2019. On 11 March 2020, Heung-A Shipping disclosed that it had commenced a debt workout, resulting in its main lender, Korea Development Bank, taking control of the company.

Although fully owned by Sinokor, which already has its own container shipping line, the acquired business unit retained the Heung-A name for branding purposes. A complete integration with Sinokor’s liner services is expected by late 2020, resulting in a combined fleet capacity of over 93,000TEU, including chartered vessels.

Following the acquisition of Heung-A Line, Sinokor said it remained financially stable, being considered the largest privately owned South Korean ship owner.

The company recorded net profits of US$7.5 million on revenues of US$1.2 billion in 2018, although long-term debt stood at US$258.17 million as the company has embarked on fleet expansion.

Sinokor is also active as a tonnage provider in other shipping segments. On 6 March 2020, Sinokor had signed a US$102.76 million sale-and-leaseback contract with China State Shipbuilding Corporation’s (CSSC) leasing unit CSSC (HK) Shipping. The contract involves four 1,080TEU ships being built at one of CSSC’s subsidiaries, Huangpu Wenchong Shipbuilding, for delivery from September to December 2021.

Martina Li
Asia Correspondent





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