Korean Shipper Files for Bankruptcy
Korea’s dry bulk shipping company Daebo International Shipping has reportedly filed an application for rehabilitation proceedings with a court in South Korea.
Daebo is the third dry bulk shipping company to file for bankruptcy protection this month following China’s Winland Ocean Shipping and Denmark’s Copenship.
Under the rehabilitation proceedings in Korea, similar to the Chapter 11 proceedings in the United States, a company is allowed to ultimately survive and continue operation, albeit in a restructured form.
It cited reasons of prolonged rout in prices for dry bulk commodities such as iron ore and coal.
Should the court grant the petition, Daebo’s further dealings will be subject to regulation by the court. A receiver would be appointed by the court and a timetable would be set for the further progress of the procedure.
In addition, Daebo would be requested to file their claims to the receiver, and should they be rejected then the claim must be brought to the court to determine.
Marine insurer Skuld said that this will have an impact on all creditors and debtors to Daebo, and members should review any open position or account they may have in relation to business dealings with this company.
Daebo International’s website lists that it has a fleet of eight vessels, including four panamaxes and one handymax bulker. Daebo was established in 1974 and operates a fleet of 30 to 35 vessels, mostly involved in coal and iron ore transport.
Shippers have described the dry bulk sector's current downturn as the worst market conditions since the 1980s.
Dry-bulkers are not the only shippers in trouble. Over 10 percent of the global liquefied natural gas (LNG) tanker fleet is currently estimated to be idled after Asian LNG prices fell almost two-thirds since February 2014.
