SEOUL: South Korea’s biggest shipping group Hanjin is set to enter receivership after its creditors refused to provide further funding to the indebted firm. Hanjin’s board unanimously agreed to make the court filing at a meeting on Wednesday, a company spokesman said.
It faces a cash shortage after failing to persuade key lenders to reschedule debt under a new restructuring plan. Shares of Hanjin remain suspended in Seoul after plunging by as much as 29% on Tuesday. Hanjin, which is also the world’s seventh-largest container line, has been unprofitable for four of the last five years.
Hanjin may get some financial relief courtesy of rival Hyundai Merchant Marine (HMM). Shares of HMM jumped by as much as 22% after Korea’s financial regulator said the firm may buy some of Hanjin’s assets. However HMM hasn’t been spared from the woes bedevilling the sector. It recently announced a reorganisation plan too. South Korea’s shipping and shipbuilding industry is one of the hardest-hit by a prolonged downturn in global trade.
