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(LEAD) Hanjin Group mulls 100 bln won to ease cargo chaos

All News 11:50 September 06, 2016

(ATTN: RECAST headline, paras 1-2)

SEOUL, Sept. 6 (Yonhap) -- Hanjin Group, the parent for cash-strapped shipper Hanjin Shipping Co., said Tuesday that it plans to provide some 100 billion won, including 40 billion won of group chairman Cho Yang-ho's private assets, to its ailing shipping affiliate to ease deepening shipping chaos triggered by the near collapse of the country's No. 1 container shipping line.

The hastily drawn-up measure came as the conglomerate came under fire for worldwide cargo disruptions caused after the world's seventh-largest container shipping firm filed for court protection in South Korea last week.

Of 97 Hanjin Shipping carriers available, only 36 are operating normally, with the remaining 61 in abnormal status. Out of the 61, 47 are standing by on the high seas, while 12 are banned from loading and unloading at ports in dozens of nations, according to the government.

The shipper plans to seek stay orders in over 40 countries to prevent its ships from being seized by its creditors.

Lee Jung-hyun (R), who heads the ruling Saenuri Party, speaks during a meeting with government officials to discuss measures for the Hanjin Shipping debacle on Sept. 6, 2016. (Yonhap)

On Tuesday, the country's financial regulator slammed the parent Hanjin Group saying it should work hard to resolve the deepening chaos, urging Hanjin Group chairman Cho Yang-ho and Korea Air Lines Co., the shipper's largest shareholder, to take measures to ease the crippled cargo flows.

The creditors, led by the state-run Korea Development Bank, offered to provide fresh financial aid to Hanjin Shipping in return for mapping out a stronger self-rescue plan, but both sides have failed to narrow their differences.

Earlier in the day, the ruling Saenuri Party also pressed the country's 10th-largest conglomerate to do more to keep the embattled affiliate afloat, promising that low-rate loans will be extended in return for collateral.

(LEAD) Hanjin Group mulls 100 bln won to ease cargo chaos - 2

On Sunday, the South Korean government said it will take a set of additional measures to ensure there are no delays or disruptions 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.

Since 2011, Hanjin Shipping has suffered losses. Last week, the creditors rejected Hanjin Shipping's self-rescue plan worth 500 billion won, saying it is far short of cash needed to save the shipper.


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