South Korean regulators allowed share trading to be resumed Monday after Hanjin’s court receivership was granted, but the share price plummeted by the daily limit of 30 percent shortly after the market opened.
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The collapse last week of the world’s seventh-largest container shipper has caused much agonising among its clients over the fate of stranded cargo. The country’s flagship carrier was the biggest shareholder of Hanjin Shipping, according to a regulatory filing.
South Korea’s top economic policymaker said Wednesday that he expected Hanjin Shipping vessels marooned offshore of Long Beach, California, will be able to offload cargo this week.
These ports are where the company sees it as least likely for the vessels to run into legal difficulties with bankruptcy protection orders recognised.
Hanjin’s ships will make calls at ports including Singapore, Hamburg and Busan, South Korea, where its vessels are unlikely to get stranded, Deputy Finance Minister Choi Sang Mok said in Seoul on Monday (Sept 5).
Hanjin Shipping was handling almost 8 percent of the trans-Pacific trade volume for the US market, and with its container ships marooned offshore, major retailers have been scrambling to devise contingency plans to get their merchandise into stores.
The nation’s Financial Supervisory Commission has said operations of 79 of Hanjin’s vessels, including 61 container ships, have been disrupted.
But Hanjin Group can not afford to seek out new loans for the shipping unit that it has given up as its flagship company Korean Air too sits on astronomical debt ratio of 1,082 percent.
“What’s most desirable, of course, is for Hanjin Shipping to revive itself”.
“Forty-five of our 144 vessels are unable to operate in the normal fashion in some 10 countries”, a Hanjin spokesman told AFP.
Global demand and trade have suffered since the 2008 recession, while steamship lines continued to build more and larger vessels – huge ships that were conceived as cost-effective when freight costs were higher several years ago.
South Korea hopes to salvage its ailing container shipping sector, which like ocean shipping worldwide has been battered by weak demand and overcapacity. Last month, parent Hanjin Group submitted a plan to creditors pledging to raise up to 500 billion won for the troubled shipper, which KDB deemed inadequate.
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Hanjin’s shares jumped 20 percent on Tuesday on hopes for government help for the company, after falling 13.7 percent on Monday.
