Hanjin Shipping also filed for Chapter 15 bankruptcy protection on September 2 at the U.S. Bankruptcy Court in Newark, New Jersey.
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South Korea’s top ocean shipping company, Hanjin Shipping Co., is in bankruptcy proceedings following years of losses, as its family-dominated controlling conglomerate struggles to adapt to an era of slowing growth.
Also Monday, some Hanjin Group officials met with officials from the state-run Korea Development Bank, the main creditor of Hanjin Shipping, apparently over how to provide assistance to the cash-strapped shipping line, a KDB official said, without giving any further details.
And it seems it could be a while before Hanjin, and U.S companies, can complete the legal steps necessary to get those ships moving again. The company reportedly filed for bankruptcy in the United States last Friday.
All companies involved in serving Hanjin vessels, such as fuel and food suppliers, will most likely demand advance payments and guarantees before continuing cooperation, Seydlitz- Kurzbach said.
Global demand and trade have suffered since the 2008 recession, while steamship lines continued to build more and larger vessels – enormous ships that were conceived as cost-effective when freight costs were higher several years ago.
Hanjin is the worlds seventh-largest container shipper and the news left cargo headed to and from Asia in limbo.
Some of California’s largest food exporters say they are monitoring the situation that is developing as the result of a Korean shipping line’s bankruptcy and failure to pay its bills.
To many South Koreans, Hanjin’s woes are typical of the difficulties chaebol are facing as offspring of the founding generation fumble in their attempts to keep control of their fathers’ and grandfathers’ business empires.
The unprecedented logistics disturbance seems to be over the hump as the Hanjin Group blitzed to make the decision for the support.
On Thursday, a Korean trade group said about 10 Hanjin ships were effectively seized in China. “But in the view of many experts, that possibility is low”, the Yonhap News Agency quoted Yim as saying.
The Hanjin spokeswoman could not explain the discrepancy between its numbers, and the 79 Hanjin ships South Korea’s maritime ministry said were denied port access yesterday.
Hanjin’s share price plummeted about 30 percent early Monday, but a flurry of buying spurred by hopes for government help for the company helped erase some of the loss by mid-afternoon.
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