Shares in South Korea’s foundering shipping giant Hanjin were volatile on Monday (Sep 5) after filing for bankruptcy protection in Seoul and reportedly the USA, sinking the maritime freight industry deeper into crisis.
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A company spokeswoman, Park Eun-hye, confirmed Hanjin was moving to protect its assets but refused to specify in how many countries, beyond the USA and South Korea.
Hanjin, South Korea’s largest ocean container shipper, will seek bankruptcy protection in 43 countries, including Canada, Germany and Britain, and the government said it would urge those countries to expedite the process. Regulations at these sites make them less likely places where the ships can get stuck, Mr Choi said. Hanjin said that out of 141 vessels it operates, 68 were not operating normally, were stranded or seized, as of Sunday.
“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”. But the group’s latest rescue plan is more or less similar to the one submitted before Hanjin Shipping filed for receivership – which creditors rejected.
South Korea’s government has chose to provide embattled Hanjin Shipping with about 100 billion won ($91 million) or more of long-term, low interest funding, wire service Yonhap reported on Tuesday.
The sum is seen as falling far short of what is required to keep Hanjin Shipping operations running day-to-day with the company having KRW600bn of unpaid obligations such as charter hire at the end of August. The stock has plunged 65 per cent this year, cutting its market value to 315 billion won. “Ltd. -Container” target=”_blank”>informed customers on its website that cargo handled under contract with Hanjin “will only be granted against a cost assumption declaration and payment of all costs”.
A Hanjin spokesman was not immediately available to confirm the report.
Global demand and trade have suffered since the 2008 recession, but shipping lines continued to build more and larger vessels.
A Hanjin spokeswoman said the company would make all efforts to prevent ship seizures and protect assets overseas. The South Korean giant filed for bankruptcy protection on Wednesday and stopped accepting new cargo.
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For US retailers, Hanjin’s filing brings concerns about products’ arrival in time for the Thanksgiving-to-Christmas shopping period. “We are waiting for a call”, Park said.
