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Hanjin Shipping in struggle to cut charter rates

All News 09:32 June 14, 2016

SEOUL, June 14 (Yonhap) -- Embattled Hanjin Shipping Co. is striving to win the hearts of the owners of its chartered fleet to cut charter rates, one of the key conditions set by its creditors to avert court receivership, industry sources said Tuesday.

According to the sources, Hanjin Shipping, South Korea's No. 1 container shipping line, has been in talks with the owners of chartered ships since April of this year, but reported little progress in their negotiations.

Creditors of Hanjin Shipping approved a creditor-led restructuring for the shipper in early May, granting a three-month suspension on all payments of principal and interest.

But they conditioned that the shipper should cut charter rates, win approval for debt recast from its bondholders and be included in a global shipping alliance.

"Hanjin Shipping is required to report some progress in its charter rate cut talks by early August," said an official at one of its creditors. "If it fails in the talks, we have to take a second step."

Hanjin Shipping has held a first round of talks with 22 owners of its chartered vessels, but failed to receive any positive responses from them.

The shipper's struggle for the charter rate cut is in stark contrast to its smaller local rival, Hyundai Merchant Marine Co., which has reached an agreement with its ship owners to cut charter rates by 21 percent.

The sources said Hanjin Shipping has to negotiate with a large number of shipowners, which means that its talks with them may be tougher.

Also, a vessel operated by Hanjin Shipping was impounded for three days in South Africa for unpaid charter fees, raising concerns that the shipper's financial status has dramatically worsened.


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