Korea's Hanjin Shipping

Logistics

1. Global customers issues :-

a) Impact

27 Aug 2010

Hanjin plays down dispute impact

KOREA'S Hanjin Shipping today played down the impact of its now-settled dispute with Sumitomo Bank and the container leasing company Unitas. Hanjin spokeswoman Sonya Cho told Fairplay that the dispute involved 5,900 boxes, only a small proportion of its approximate total of 400,000 containers across its fleet. The amount paid to end a number of litigations between the three companies, in both the UK and the US, is confidential, but Cho described the sum as "not a significant amount considering the size of our business". Last month, the company said it faced $43.8M in lost profits from its inability to use the disputed containers when it counter-sued Sumitomo and Unitas in the US after they threatened to arrest the boxes. Cho told Fairplay that the settlement "does not only include a payment", but she could not provide further detail on other elements. In a statement, the company says the parties "have reached a mutual agreement in full and final settlement of all pending claims", without referring to specific aspects - payments or otherwise - that form the agreement. Cho confirmed that it was Hanjin that made the payment part of the deal. Following the settlement, Hanjin now owns all the boxes involved in the dispute. Hanjin is reintroducing the boxes to service, after taking them out of use because of the threat of arrest. "It will certainly be a relief to our customers in terms of security," Cho said. The dispute centred on whether a $2.6M 'balloon payment' made at the end of a lease agreement on the containers gave it ownership of the boxes. Cho said there had been a "misunderstanding over the contract".

b) Substantially

Fri, 8 Jul 2011

Hanjin raises $150 million in bond issue

As South Korean container shipping line Hanjin Shipping looks to expand its fleet, it announced it has raised US$150 million from the sale of five-year convertible bonds and hopes to raise a further $50 million.

JP Morgan was the sole bookrunner for the offering, which was made on Wednesday.

The carrier said the cash raised from the sale would be used for general purposes, but has recently confirmed plans for five new 13,000teu vessels at a total of $845.9 million.

The five-year convertible bonds were marketed at interest of between 3.5% and 4%.

The share price for converting the bonds to stock was set at Won29,640 (US$27.8), which represents a 20% premium over the stock's closing price of Won24,700.

The conversion premium was marketed in a range between 20% and 25%.

The sale was launched with a base issue size of $150 million and an "upsize option" of $50 million, which can be exercised within the first 30 trading days.

The five-year offering will mature in 2016, but investors have the option to put the bonds back to the issuer in the third year.

c) Customer service audit (external)

MAY Named '2010 Logistics Supplier of the Year' by Hewlett-Packard Company

APR Named 'Carrier of the Year' by the U.S. Owens Corning, 7 Consecutive

MAR Named 'Best Partner' by Samsung Electronics, China

FEB Named Sole 'Best Partner' by Samsung Logitec

NOV Received MASTA Award by U.S. Masco Corporation

SEP Named '2006 Korea's World Class Company' by Korea CEO Association, 3 Consecutive Years

FEB 2006 Management Transparency Awards (a runner-up)

OCT One of 'Asia's Fab 50 Companies' by Forbes

JUL Best Buy's 2005 Quality Partnership Award

JUN 2004 Carrier of the Year by Rayonier

APR One of the Top Ten Companies that will lead Korea's future economy by Dong-A Ilbo

MAR "Carrier Service Excellence Award" by Owens Corning

JAN Best Partner by Samsung Electronics in China

DEC The Most Valuable Company in Shipping by Korea Management Association

Excellent Qualifications & Credibility in International Liner Service in China

Trade Award by Korea Trade Research Association

NOV Carrier Service Excellence Award for 2004 by Fred Meyer

JUL The Most Respected Shipping Company by Korea Management Association

JUN Chairman Cho won the Honorary Medal of Gold by the City of Hamburg

MAY "Customer Service Award" by Marine Digest Cargo Business News

MAR "Carrier Service Excellence" award by Owens Corning

FEB "Best e-Business in Shipping in Korea" by Korean