Morris Nichols Represents Terminal Investment Limited in Acquisition of Controlling Stake in Total Terminals International
Wilmington, DE (February 6, 2017) - Morris Nichols successfully represented Terminal Investment Limited SARL (“TiL”) as lead counsel in its cross-border acquisition from Hanjin Shipping Co., Ltd. (“Hanjin”) of a controlling stake in Total Terminals International, LLC (“TTI”), a Delaware limited liability company which operates two marine terminals on the U.S. West Coast. The complex deal successfully closed on February 1, 2017.
Hyundai Merchant Marine Ltd. (“HMM”) joined with TiL in the acquisition and obtained a minority stake in TTI. The deal required approval of the courts in the Republic of Korea and the United States overseeing Hanjin’s cross-border insolvency proceedings, as well as approval of the Ports of Long Beach and Seattle and the lenders on TTI’s $320 million secured credit facility to effectuate a concurrent restructuring of TTI’s obligations. Robert Dehney, Eric Schwartz, and Matthew Harvey from the Morris Nichols Business Reorganization & Restructuring group, and Jason Russell and Nathan Barnett from the firm’s Commercial Law Counseling group worked on the engagement.
TTI operates Pier T, the busiest terminal at the Port of Long Beach, Calif., and Terminal 46 at the Port of Seattle, Wash. Until recently, Hanjin and TiL owned 54% and 46% of TTI, respectively. Hanjin and its shipping alliance members accounted for approximately half of the container volume and revenues at TTI terminals. When Hanjin abruptly sought bankruptcy protection in September 2016, these volumes and revenues immediately ceased, causing TTI to become distressed. TiL, advised by Morris Nichols, took steps to preserve its rights as an owner of TTI through court filings in Korea and the United States, while also participating in a Korean-court supervised sale process to acquire Hanjin’s stake in TTI via a joint bid with HMM.
The joint bid of TiL and HMM ultimately prevailed as the highest and best bid with cash consideration of $72.5 million plus assumption of the $320 million TTI credit facility and other consideration. As part of the deal, TiL and HMM also purchased for $5.5 million Hanjin’s interests in and shareholders loans to Hanjin Shipping TEC, Inc. (“HTEC”), an equipment leasing company at the Port of Long Beach.
TiL’s plan for TTI required renegotiating agreements with the Port of Long Beach, the Port of Seattle, TTI and HTEC’s lenders, and other constituents to effectuate a restructuring of TTI. Morris Nichols lead the negotiations with the Ports and the lenders, and successfully obtained the required concessions and consents to allow TiL to close the transaction.
The firm also worked with Hanjin’s counsel to overcome U.S. creditor challenges to the deal, and win Korean and U.S. bankruptcy court approval of the transaction. The U.S. bankruptcy court entered an order approving the deal on January 23, 2017, and the transaction successfully closed on February 1, 2017.
About Terminal Investment Limited SARL (“TiL”)
TiL is one of the largest and most geographically diverse container terminal investors globally. TiL currently owns interests in 36 operating container terminals and one terminal under development in 21 countries spanning Europe, Asia, North America, South America and West Africa.
About Morris, Nichols, Arsht & Tunnell LLP
Morris Nichols combines a broad national practice of corporate, intellectual property, business reorganization and restructuring, commercial law and litigation with a general business, tax, estate planning and real estate practice within the State of Delaware. The firm is regularly involved as lead counsel or co-counsel in matters of national and international significance, as well as those affecting its immediate community. Follow us on LinkedIn or Twitter.