Hanjin Shipping Secures $45 mln to Rescue Stranded Cargo
Parent group transfers $36 mln to troubled shipper. It may cost over $150 mln to unload stranded cargo.
The chairman of Hanjin Group transferred 40 billion won ($36 million) to Hanjin Shipping on Tuesday to help unload cargo stranded on the troubled shipper's vessels, a spokesman said, but regulators warned securing further funds could take "considerable time".
The parent of Hanjin Shipping pledged last week to raise 100 billion won to help rescue cargo in the wake of the collapse of the world's seventh-biggest container shipper, including the 40 billion won from Chairman Cho Yang-ho.
About $9 million pledged by Choi Eun-young, a former chairwoman of Hanjin Shipping, has also come in, the shipper said.
Around $14 billion of cargo has been tied up globally as ports, tugboat operators and cargo handling firms worried about not being paid refused to work for Hanjin, which filed for receivership in a Seoul court early this month.
Hanjin Shipping submitted early last week to a South Korean court that it could take an estimated 173 billion won ($154.5 million) to unload all stranded cargo, a Seoul Central District Court judge told Reuters.
Korean Air, the top shareholder of Hanjin Shipping, on Saturday approved a plan to lend the shipper 60 billion won, conditional on Hanjin Shipping providing its stake in Los Angeles' Long Beach Terminal as collateral. That deal requires the approval of other shareholders and creditors of the terminal.
It may take "considerable time" for Korean Air to provide the loans for Hanjin Shipping, South Korea's top financial regulator said, according to a regulatory official. "It is being reviewed whether it is possible to secure the funding" from Korean Air, Financial Services Commission Chairman Yim Jong-yong said at a meeting with South Korea's ruling party.
South Korea has said no government or central bank money will be directly injected into firms restructuring in the ailing shipping and shipbuilding industries, though it is helping small-to-medium sized businesses hit by the restructuring.
RISKS IN AUSTRALIA
In Sydney, the Hanjin California, which docked on Sept. 3, remained held in port following a Federal Court order filed by Glencore Singapore Pte Ltd over unpaid fuel bills. Most of the containers on the 182-metre-long vessel have been offloaded, but some destined for other ports were still being held, port authorities said.
Six other Hanjin vessels were heading to Australia and risked being seized by creditors, two sources familiar with the situation said.
Unlike in the United States, Britain, Japan and provisionally Singapore, Hanjin has no protection in Australia against creditors for unpaid bills.
"It's likely someone will put a claim on the assets," said one of the sources, who declined to be identified due to the sensitivity of the matter.
A spokesman for Glencore Singapore declined to comment on whether it had or planned to issue a warrant on more Hanjin vessels.
Some 93 vessels, or two-thirds of Hanjin Shipping's fleet, are not operating properly, including vessels seized, barred entry to ports or terminals, denied services or moving slowly, according to Hanjin Shipping data on Monday.
Truckers began moving freight from the Hanjin Greece, one of roughly a dozen of the company's ships destined for the U.S. West Coast, out of Long Beach port on Monday, following a U.S. bankruptcy court's grant of protection.
Hanjin Shipping on Tuesday offered "a deep apology for causing damage to many interested parties" and said it set up an emergency management committee to deal with the cargo confusion.
By Hyunjoo Jin and Cecile Lefort