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Hanjin Shipping stocks plummet on receivership filing

All Headlines 10:12 September 05, 2016

SEOUL, Sept. 5 (Yonhap) -- Stocks of Hanjin Shipping Co., South Korea's top container shipping line and the world's seventh-largest, plunged on Monday after it filed for court protection last week stoking concerns that it may be liquidated on worsening business conditions.

Hanjin Shipping stocks were trading at 964 won (US$0.9) on the Seoul bourse as of 10:00 a.m., down 22.26 percent from the previous session's close. The trading of the shipper has been halted since Tuesday. On Wednesday, the shipper applied for receivership in South Korea after its creditors, led by the state-run Korea Development Bank rejected its latest self-rescue plan.

Since late last month when creditors signaled they would cut off financial help to the beleaguered shipping firm, Hanjin Shipping's vessels have been denied access to ports worldwide as lashing companies and port workers refused to work out of concerns that they would not be paid. Also, some of its ships have been seized by its creditors.

Hanjin Shipping has been striving to cut its chartered rates and extend the maturity of debts in the face of worsening financial health stemming from a continued fall in freight rates.

According to Hanjin, 68 out of its 141 vessel fleet have been stranded in seas off China, Australia and the United States.

Hanjin Shipping's receivership filing has caused chaos in the global shipping sector and freight rates surged sharply as retailers scrambled to find alternatives for Hanjin-operating routes.

On Sunday, the South Korean government said it will take a set of additional measures to ensure there are no delays or disruption to the flow of cargo caused by the Hanjin fiasco.

Earlier, the government said Hyundai Merchant Marine Co., the country's No. 2 shipper, plans to deploy 13 ships on Hanjin Shipping-operated routes.

Four Hyundai ships will replace Hanjin's American region fleet and nine other ships will be used on the European route, it said.

Hyundai Merchant Marine, currently under a creditor-led debt restructuring scheme, may seek to take over Hanjin Shipping's healthy assets, such as port terminals and global business networks.

A local court has ordered the shipper to submit its self-rehabilitation plan by Nov. 25.

Hanjin Shipping stocks plummet on receivership filing - 1

sam@yna.co.kr
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