By Kyunghee Park

(Bloomberg) — Hanjin Shipping Co. gained essentially the most in every week in Seoul buying and selling as issues that the unprofitable delivery line wouldn’t be capable of survive eased after the federal government indicated a merger with a smaller rival is feasible.

Hanjin Shipping, South Korea’s largest container delivery line, climbed 6.3 p.c to shut at 2,290 received, the biggest achieve since June 7. Hyundai Merchant Marine Co., the nation’s second-biggest container delivery line, superior 2.4 p.c to 14,900 received.

South Korea is reviewing varied measures together with a doable merger to extend competitiveness in its delivery business, which is scuffling with mounting debt after years of losses from weak demand, the Financial Services Commission stated Monday. Hanjin Shipping is amongst liners worldwide which are promoting property, consolidating and searching for new partnerships to stem losses as slowing commerce and overcapacity depress cargo charges.

“The government’s comment that a merger may be possible has raised expectations that Hanjin Shipping may be able to survive,” stated Cho Byoung Hee, an analyst at Kiwoom Securities Co. in Seoul. “Fundamentally, nothing has changed.”

Charter Rates

Hanjin Shipping is in talks with shipowners to scale back constitution charges as a part of a requirement by collectors in alternate for funds to enhance its financials. Hanjin Group Chairman Cho Yang Ho met with Gerry Wang, chief government officer of Seaspan Corp., to debate adjustments to constitution charges, Hanjin Shipping stated in an e-mailed assertion Tuesday. The South Korean firm at the moment operates seven container ships leased from Seaspan.

Last week, Hyundai Merchant stated it reached an settlement for shipowners to scale back the charges in alternate for fairness within the ailing firm, and expects to signal a ultimate accord by the tip of this month.

CMA CGM SA, the world’s third-biggest container delivery firm, in December provided to purchase Singapore’s Neptune Orient Lines Ltd. for S$3.38 billion ($2.5 billion) within the business’s largest acquisition since 2005.

France-based CMA CGM additionally agreed to kind a brand new partnership with three different traces and Hanjin Shipping teamed up with Hapag-Lloyd AG and 4 others to kind “ The Alliance.” The two new teams are scheduled to start out operations in April subsequent 12 months and can compete in opposition to the world’s largest partnership between A.P. Moeller-Maersk A/S and Mediterranean Shipping Co.

© 2016 Bloomberg L.P