Welcome to Shipping Online!   [Sign In]
Back to Homepage
Already a Member? Sign In
News Content

HMM to appoint new CEO in August to turnaround the debt-laden company

HYUNDAI Merchant Marine will have a new CEO in August to replace Lee Paik-hoon. The new CEO will be tasked with returning the company to profitability, overseeing its restructuring and leading the company into a new era of mega-ships and membership in the 2M Alliance.

"There will be a new CEO for HMM, but we haven't decided on a candidate yet. We have appointed executive search firms to look for the right person, and the candidate could be a foreigner,?said a spokesperson for the Korea Development Bank (KDB), which became HMM's largest shareholder in June.



The shipping line has signed a binding memorandum of understanding to join the 2M Alliance of Maersk Line and Mediterranean Shipping Co., a dramatic turnaround for a company that a month earlier was on the brink of receivership. The new, three-member 2M still needs regulatory approval, reported IHS Media.



In addition to searching for a new CEO, KDB and other creditor banks are talking to consulting firms to formulate management plans that will help HMM regain its competitiveness. Those plans will likely involve the deployment of mega-ships, South Korean government funding of which HMM will be able to tap after its debt ratio falls below 200 per cent. 



HMM is already taking advantage of the expanded Panama Canal to reduce its per-unit costs by sending ships of 10,000 TEU to the US east coast, replacing 4,600-TEU ships. 



The 10,000-TEU ships are on a long-term charter from Zodiac Maritime and bring the total number of ships in excess of 10,000 TEU HMM operates to 16. Of those 16, five are owned by HMM, while five have capacities of 13,000 TEU and are on long-term charter. The six ships from Zodiac make up the remainder.



As of March 31, the company had a working capital deficit of US$2.14 billion. HMM's first-quarter losses widened to KRW276.68 billion ($234.2 million) from a KRW49.79 billion net loss in the same period of 2015, as revenue declined by 18.8 per cent year on year to KRW1.16 trillion.
About Us| Service| Membership and Fee| AD Service| Help| Sitemap| Links| Contact Us| Terms of Use