Its debt stood at 5.6 trillion won at the end of 2015, and a bankruptcy would be the container shipping industry’s largest. Shares of South Korea’s largest shipping line jumped by the daily 30 percent trading limit.
Advertisement
Hanjin Shipping Co’s parent firm plans to raise 100 billion won ($90.46 million) to fund the unloading of billions of dollars worth of cargo aboard vessels stranded around the world in the wake of its court receivership filing last week.
The recent bankruptcy of South Korea’s Hanjin Shipping Co. has not only stranded vessels and cargo at sea but also its sailors, putting their basic human rights at risk.
Shares in South Korea’s foundering shipping giant Hanjin were volatile on Monday after filing for bankruptcy protection in Seoul and reportedly the USA, rocking the troubled maritime freight industry.
“The government is trying to extinguish the most immediate fire” to help ease some supply-chain bottlenecks, Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan, said Monday. “So those toys held up in container boxes will be able find their way to consumers”.
Since 2011, Hanjin Shipping has suffered losses. The stock is now more than 40 percent from a month ago and 80 percent down over the year. Although each stranded vessel is equipped with emergency food and items to cover up to 15 days, life onboard could turn hard beyond that.
The Financial Supervisory Commission said 79 of Hanjin’s vessels, including 61 container ships, have had their operations disrupted. Offloading the containers would help Hanjin Shipping’s clients like LG Electronics Inc. get their goods back on land and transported via other ships or by road to their customers.
As most of Hanjin Shipping Co’s assets are stranded at sea or in ports world-wide, the the South Korean company is seeking to protect assets world-wide.
If the filing is recognized, the court will block creditors in the USA from seizing the company’s assets or launching other legal actions while its other bankruptcy proceedings are under way, the report added. Hanjin Shipping’s collapse last week has caused chaos in global trade networks and a surge in freight rates, as ports and vendors refused to provide services to Hanjin vessels for fear they won’t be paid.
Eurogate, Hamburg’s second-biggest container-terminal operator, informed customerson its website that cargo handled under contract with Hanjin “will only be granted against a cost assumption declaration and payment of all costs”.
Even with the government’s belated measures, the KSA expects that all of Hanjin ships may ground to a halt within the next two to three days as the U.S. and Korean courts have begun their bankruptcy protection process for the country’s largest shipping line.
Advertisement
Before it’s here, it’s on the Bloomberg Terminal.
