Pan Ocean stops M&A

Pan Ocean Shipping decided to interrupt the M&As that the company has put so much effort into.

Pan Ocean announced on September 20 that though it received final reports from three investment companies, domestic and abroad, as of August 10, the offered prices failed to meet expected levels. Through negotiations with the courts and credit banks, it finally decided not to choose a preferred negotiating partner, resulting in M&A interruptions, said the company.

Pan Ocean Shipping has been underway with its M&A through issuing new bonds; the Korea Industrial Bank and the KPMG Financial Service consulting company have been in charge of it since January 16, 2001.

"There is no reason to undertake an M&A on unfavorable terms as we are not confronting urgent financial problems. And though we are facing worse maritime markets, we can't accept the current conditions. So the credit banks reached the conclusion that additional negotiations won't better the conditions," said Pan Ocean Shipping.

"We are going to keep talking with credit banks about the normalization of company operations. If the domestic and international environments turns favorable, we will try for an M&A again," revealed Pan Ocean Shipping.

However, shipping industry analysts worried that as Pan Ocean Shipping gave up on normalization methods through the M&A, its court receivership may cause its management to see further mounting pressures.

Pan Ocean Shipping had no liquidity problems thanks to a favorable maritime market last year. It, however, is under court-receivership and cannot invest in new vessels. It is also obliged to repay 200 billion won every year.