In International Shipping News 18/11/2016
A Seoul court is expected to decide the fate of cash-strapped Hanjin Shipping Co.’s rehabilitation scheme in February at the earliest, as it pushed back the deadline for an accounting firm to submit a rehabilitation plan for the embattled shipper, the shipping line said.
Hanjin Shipping has been under court receivership since early September, as its creditors, led by the state-run Korea Development Bank, rejected its last self-rescue package worth 500 billion won, which fell short of the 700 billion won demanded.
According to Hanjin Shipping, it is required to submit the rehabilitation plan by Feb. 3, rather than the original deadline of Dec. 23, and Samil PricewaterhouseCoopers was ordered to report its assessment of the shipper’s status by Dec. 12.
Hanjin Shipping has been seeking to sell its assets in an effort to survive an industrywide slump and cash shortage.
Early this week, mid-sized shipping line Korea Line Corp. was chosen as the preferred bidder for Hanjin Shipping Co.’s Asia-U.S. route, with the asset sale by the country’s ailing shipper expected to be completed this month.
The U.S.-Asia route, its related workforce and seven overseas operations up for sale could fetch up to 100 billion won (US$85.4 million), industry sources said.
In addition to the U.S.-Asia route, Korea Line will be given a chance to bid for Hanjin’s stake in the Port of Long Beach, California.
Hanjin Shipping’s Asia-U.S. route logs sales of up to 4 trillion won annually, and its market share stands at 7 percent, the sixth-largest among global shippers.
Hanjin Shipping badly needs cash to repay debts and meet unpaid service bills. At the end of June, its debt reached 6 trillion won.
Hanjin Shipping and local shippers have been under financial strain due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy.
Source: Hanjin Shipping
