This follows the latest break-down in talks between the existing majority shareholders – the Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC) – that controlled almost 58% of HMM and the buyers last week. Closure of the deal had already been extended from an original deadline of 23 January, but failure to find a compromise on several issues, thought to include the timing of any exchange of US$1.3B in convertible bonds owned by KDB and KOBC and potential dilution of Harim-JKL’s shares in HMM, the consortium’s management competencies, and future investment strategies, resulted in the sale process being terminated.

A statement issued by KDB and KOBC said: “During the seven-week negotiation period, we worked diligently on mutual trust, but the negotiations ultimately broke down due to differences of opinion on some issues.”

The Harim Group also expressed disappointment at the deal’s failure. Its statement read: “Negotiations weren’t easy, as we had a different position from the sellers. It’d be difficult for any private company to accept a deal that produces only the largest shareholder without guaranteeing actual management rights.”

It is also believed that the considerable uncertainty in the global shipping markets, including rising geo-political tensions, the huge disruption caused by the Houthi attacks in the Red Sea and Hapag-Lloyd’s notice to resign from THE Alliance, in which HMM is a member, influenced the discussions.

It means HMM, which is the world’s eighth largest liner shipping company, will once again be managed by its main creditors. Inevitably, this raises concerns over future investment levels and its ability to compete effectively in markets that are becoming increasingly challenging. Moreover, it is unlikely that any resale process for HMM will start any time soon.