The airline’s loan is in addition to 40 billion won provided by the Hanjin Group’s chairman, but the total is still short of the 173 billion won Hanjin estimated in a court submission this month that it needed to unload all cargo.
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South Korea-based Hanjin filed for bankruptcy August 31, leaving some $14 billion in cargo stranded at sea and disrupting the global supply chain, according to an ACA press release.
In a setback to revival efforts, the board of Korean Air Lines Co., the biggest shareholder of Hanjin Shipping, failed to reach a resolution when it met Sunday to discuss ways to expedite the injection of 60 billion won ($54 million) it had pledged earlier. Though the government estimates the company needs at least 600 billion won to cover unpaid costs such as fuel and cargo handling, the funds may immediately help Hanjin ease the supply disruptions.
Around 30 of Hanjin’s 97 leased and owned container ships have completed unloading, South Korea’s finance minister said on Wednesday.
Hanjin Shipping may be able to secure 160 billion won ($14.5 million) in funding, almost the 170 billion won that government officials say is needed to resolve its global cargo crisis. A spokesman for Hanjin declined to comment on the court meeting.
Hanjin has begun returning chartered vessels to their owners and had been trying to secure funds to help unload ships. Hanjin Group is one of the largest transportation conglomerates in the world and controls both Hanjin Shipping and KAL. Shares in rival Hyundai Merchant Marine Co surged 16 percent to a near two-week high. With the financial status of the company in doubt it was questionable whether the money existed to pay for the ships to be unloaded.
Other New Jersey-based creditors include ground transport chassis provider Trac Intermodal Inc.in Princeton and Container Royalty Central Collection Fund in Lyndhurst, a benefit fund for longshoremen. After a weeklong deliberation, the board directors of Korean Air allowed the flag carrier to take out 60 billion won from its hoard and lend it to its troubled sister company backed by receivables. An estimated US$14 billion of cargo was initially trapped on its ships around the world at the time of its collapse.
Shares in Hanjin, which had fallen by more than 20 per cent on Wednesday as fears of liquidation grew, rallied strongly today, increasing their value by some 28 per cent. Freightos, an online freight shipment booking agency, reported that the average price per container on Asia-U.S. routes rose to $4,423 from $2,835 within a week.
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A court in Seoul is hearing Hanjin Shippings application for receivership and will decide whether the distressed company could be revived or if it needs to be liquidated.
