The parent company of South Korea’s Hanjin Shipping Co. said Tuesday that it would raise and spend about $90 million to try to ease a cargo crisis at ports in Los Angeles, Long Beach and around the world caused by Hanjin’s filing for bankruptcy protection.
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Hanjin Shipping, which many analysts and industry insiders expect eventually to be liquidated, had about 600 billion won in unpaid obligations such as charter fees and terminal use fees as of end-August.
The world’s seventh-largest ocean shipper, Hanjin Shipping is part of the Seoul-based Hanjin Group, a huge, family-dominated conglomerate, or chaebol, that also includes Korean Air.
“Considering its large presence in global trade, many have been anxious that its bankruptcy would deal a big blow to Korean exporters by delaying deliveries of exporters’ goods and payments”, said KITA in a statement on its website.
The owners of Hanjin Shipping will provide 100 billion won ($US90 million) to contain disruptions to the global supply chain after the shipping carrier went into receivership, financial news service Bloomberg has reported. “However, it’s too unrealistic (for the creditors) to rescue it in light of the company’s huge debts”, said Kang Seong-jin of KB Investment Securities.
Hanjin Shipping shares jumped as much as 28 percent on Tuesday morning before trimming their gains to be up 20 percent at midday.
Although expectations that Hanjin Shipping will be able to survive are low, the stock surged 30 percent on Tuesday, the daily limit, as investors made speculative bets on a stock that hit an all-time low on Monday.
“We are waiting indefinitely”.
“Basically, Hanjin Shipping is under court receivership, so we can discuss (the issue) with the court”, Lee told Yonhap News Agency.
“If Hanjin ships with cargo fail to dock at ports, exporters could also have to bear additional expenses on extra loading and offloading of goods as well as on finding other vessels for shipping their goods to the final destinations”.
He said the ship has about 10 days worth of meals and 20 days worth of other foodstuffs.
Hanjin Shipping said that as of late Monday, 73 of its ships were seized or denied access to ports, comprised of 66 container ships and 7 bulk carriers.
Hanjin has 141 ships, of which 128 are operating.
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Last month, Hanjin Group submitted a plan to creditors pledging to raise up to 500 billion won for the troubled shipper, which its lead creditor, state-run Korea Development Bank, deemed inadequate. They are carrying cargo worth 16 trillion won, the Korea International Trade Association said on Monday.
