Hanjin Shipping to Submit Self-Rescue Plan
South Korea’s Hanjin Shipping is planning on submitting a self-rescue plan to creditors this week to stave off bankruptcy by Aug. 25, reports Korea Herald quoting local media.
According to the shipper, the plan includes details on securing funds from its parent Hanjin Group and cutting charter fees from foreign vessel owners.
According to Pulse, Hanjin Group is expected have stronger units like Korean Air help out their troubled affiliate Hanjin Shipping through new share purchase and negotiate for cut in charter fees to up to 28 percent to normalize the country’s largest cargo carrier.
The group is fine-tuning a new rescue package for Hanjin Shipping to submit the plan to state-run Korea Development Bank and other creditors within this week.
Once the self-rescue plan is submitted, the creditors -- led by the state-run Korea Development Bank -- will decide whether it will give some breathing room to the shipper to stay afloat, such as by extending the maturity period of its debt or offering an equity swap for loans.
Creditors warned that they could send the shipping company to court receivership once the temporary relief from creditors’ workout program ends on Sept. 4, demanding more group support for the company in order to prevent insolvency.
Ship financing remains a challenging issue. Domestic creditors agreed to extend the maturity period, but no progress was made in talks with foreign creditors.
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.
