Hanjin Shipping Co., the South Korean container line that sought bankruptcy protection last month, received a court advisory to return all chartered vessels to cut costs while the company is in the midst of reducing its fleet. The nations Financial Services Commission had on September 1 said the possibility of liquidation cant be ruled out.
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Hanjin’s court-sanction self-restructuring plan has left many of its containerships either unable to dock or to unload their cargo without risking seizure by creditors, but many other Hanjin container vessels have been stranded due to the lack of court-issued stay orders.
Hanjin’s collapse has caused “widespread disruptions in freight shipments worldwide”, United States trade groups said in a letter Tuesday, urging the Commerce Department to work with the South Korean government and end the crisis. “They will probably refuel, re-provision, and I have been told that about half the crew will be changed out by the company that owns the ship itself”.
The bankruptcy filing by the Korean company, which controlled 2.9% share of the global container ship traffic, threw supply chains in turmoil during peak season when retailers look to stock up warehouses and shelves to prepare for the year’s biggest holiday sales – Thanksgiving and Christmas.
The Wall Street Journal reports that of the 69 ships still carrying cargo, 34 remain at sea while 35 ships are headed back to South Korea.
The financing will be provided immediately, and the shipping company’s accounts receivable will be used as collateral, top shareholder Korean Air Lines Co. said in a text message after the carrier’s board approved the funding.
Hanjin is the seventh-largest shipping company in the world. However, it remains to be seen whether Korean Air would get approval from its outside board.
At the Hanjin Newport section of Busan port, 78.6 per cent of container capacity was filled as of Wednesday morning, higher than the 60 per cent preferred for efficient operation, the port spokeswoman said.
Korean Air is discussing new measures to ease the disruption, Yonhap News reported Monday, citing people it didn’t name.
Shares in Hanjin dropped by more than a fifth to a record low after the court comments were reported, which lent support to the view the company will slide into liquidation. A representative for Hanjin Shipping declined to comment.
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Shares in the firm plunged 10.3 percent in Seoul to close at 1,130 won.
