Hyundai Merchant Marine (HMM) has denied reports that it is seeking US$8.9 billion in funding from the Korea Development Bank (KDB) so it can grow to be the eighth largest global container shipping company, a spot currently held by Yang Ming Marine Transport Corporation.
According to Business Korea, management consulting company AT Kearney has been asked by South Korea's HMM to estimate the funds that would be needed to expand its operations.
It reportedly stated that HMM would need $5 billion for large container ships, $2.9 billion for container boxes at $1,800 each, which would purchase 1.6 million units and $900 million for the takeover of overseas terminals.
HMM is currently in 15th place on Alphaliner's Top 100 carrier list with 344,681 TEU and a market share of 1.6%. It would need an additional 239,842 TEU in vessel capacity to jump seven places and equalize with Yang Ming's fleet.
A representative from HMM is quoted as saying: “There has been no internal decision on the investment amount needed for the medium and long term, including the money for building new vessels and container ships… we have not made any request to the Korea Development Bank.”
HMM used to move almost all of Korea's exports with Hanjin Shipping before it went bankrupt last year.
HMM posted a $749 million operating loss last year, but its June 2017 results have revealed that it may be recovering as its Asia-US west coast volumes increased 77% year-on-year.
According to the US JOC 'Piers Data' on July 25, HMM's cargo volume to the west coast of the US from Asia grew 77% to 10,405 TEUs from 7953 TEUs in the same month of last year.
An HMM official commented: “HMM’s volume has dramatically increased, as it has regained customer trust through a successful restructuring and has expanded shipping networks through ‘2M+H strategic cooperation’ and ‘HMM+K2’ consortium. We expect higher volumes in the 3rd quarter since we’re heading into the peak season.”