Pan Ocean encounters trouble in sales

Though Pan Ocean Shipping is under court receivership and has pushed to sell itself, it failed to find a preferred negotiating partner because of differing bargaining prices.
According to creditors and the shipping industry, Pan Ocean is hoping to name one domestic or foreign company or a consortium as its preferred negotiating partner as soon as possible. However, the deal caused controversy because they haven't yet settled on a mutually acceptable price.

The companies having submitted Letters of Intent to Pan Ocean Shipping include Daebo Shipping and a Singaporean Shipping company, as well as the IMC along with some domestic and overseas funding companies. Pan Ocean is hoping to receive about 200 billion won at its costs, while applicants have suggested half that price.

"It looks like we've failed to select a preferred negotiating partner at this time. Two or three months later, we will again be receiving applications", a Pan Ocean official said.

A source in the industry said that it looks difficult to choose a preferred negotiating partner because companies under-value Pan Ocean. Hyundai Merchant Marine, Hanjin Shipping and SK shipping also considered taking over Pan Ocean, however, they pulled out because Pan Ocean is a tramper liner and possesses older vessels.

Pan Ocean Shipping, ranking third with 1.64 trillion won in sales activity last year, has been under court receivership since November 1993, when it tried to take over insolvent shipping companies according to government policies, worsening its financial structure. Except for 1997, it has been in the black since 1995.