Back To Top

Hanjin Shipping likely headed for court receivership

[THE INVESTOR] Industry observers are increasingly concerned that Hanjin Shipping is likely to enter court receivership due to financial difficulties, according to news reports on Aug. 19.

The nation’s largest container carrier has been under creditor-led rehabilitation -- with conditions attached -- since May due to the escalating debt level, hit by falling ship prices amid a global economic slump. Under the requirements, Hanjin Shipping has to cut charter fees, join the global shipping alliance and secure additional cash flow, among other conditions. 



The creditors asked Hanjin Group to inject at least 700 billion won (US$626 million) to save its shipping arm. But the parent company said it can only offer up to 400 billion won as the group lacks financial room to maneuver.

Hanjin Shipping has to submit a self-rescue plan, including details on securing liquidity, to the creditors by early next week at the latest. But the shipper hasn’t come up with a plan yet, according to reports.

If the shipper fails to fulfill liquidity and other requirements by the due date of Sept. 4, it seems unlikely for Hanjin Shipping to stave off court receivership.

Industry watchers are concerned the collapse of Hanjin Shipping will be a further blow to the already troubled shipping and shipbuilding industry, as well as to lenders that have extended significant amounts in bad loans to the industry.

By Ahn Sung-mi (sahn@heraldcorp.com)

MOST POPULAR
LATEST NEWS
subscribe