“The government agreed to provide cheap long-term loans to Hanjin Shipping if Hanjin Group or Chairman Cho Yang-ho offer loan securities that have asset value in Hanjin Shipping”, said Saenuri policy chief Kim Gwang-lim after attending a ruling party-government meeting on September 6.
Advertisement
Hanjin sought bankruptcy protection in the US and South Korea last week.
Shares in South Korea’s foundering shipping giant Hanjin were volatile on Monday (Sep 5) after filing for bankruptcy protection in Seoul and reportedly the U.S., sinking the maritime freight industry deeper into crisis.
South Korea’s 11th-largest conglomerate said the funds are being raised to “normalize the unloading of Hanjin Shipping’s containers” to “minimize the damage to exporters and importers”.
Hanjin’s bankruptcy was threatening local employees’ jobs and merchants’ access to goods just before the crucial holiday season, politicians said.
Hanjin, the world’s seventh and South Korea’s largest shipping firm sought court protection after creditors rejected its latest plan for dealing with a hulking $5.37 billion debt.
According to Reuters, Hanjin Shipping had a debt of 5.6 trillion won at the end of 2015, and at least three USA companies have launched legal action against the shipping giant to seize vessels and other assets over unpaid bills.
The map shows the locations of the Hanjin container ships. Hanjin said that out of 141 vessels it operates, 68 were not operating normally, were stranded or seized, as of Sunday.
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.
As most of Hanjin Shipping Co’s assets are stranded at sea or in ports world-wide, the the South Korean company is seeking to protect assets world-wide.
“Basically, Hanjin Shipping is under court receivership, so we can discuss (the issue) with the court”, Lee told Yonhap News Agency. The company is at risk of creditor action in the USA, and its current financial state renders it impossible to repay 3.14 trillion won of loans maturing within one year, the filing showed.
Advertisement
The South Korean Government has also been asked to offer around 100 billion won of loans at low interest rates if Hanjin provides collateral, Bloomberg reported.
