In International Shipping News 15/07/2016
Source: The Korea Times
The ailing Hanjin Shipping is exploring all avenues to sell assets and secure liquidity to stay afloat, but it faces an uphill battle with two weeks until a looming creditor deadline.
The firm, under a creditor-led restructuring program, said Wednesday it sold its 21 percent stake in Tan Cang Cai Mep International Terminal in Vietnam for 23 billion won ($20 million) to Hanjin Transportation, a parcel delivery company under Hanjin Group.
The move is the latest in Hanjin’s 411 billion won self-rescue plan it submitted to creditors in April. It also sold a bulk carrier to H-Line Shipping for 14 billion won as well as its H-Line Shipping stake for 33 billion won.
Last month, Hanjin Shipping sold its trademark rights to Hanjin Kal for 74.2 billion won and operating rights on eight Southeast Asian routes for 62.1 billion won. The company also sold its London and Tokyo offices for 32.2 billion won and 8.2 billion won, respectively. Through the selling spree, the company has so far secured some 267.7 billion won.
But despite efforts to avoid court receivership, the situation remains tough for Korea’s top shipping line.
In May, Hanjin Shipping’s creditors, led by state-run Korea Development Bank, granted three months of debt relief ― until Aug. 4 ― on condition the shipper reduces charter costs by 30 percent and holds meetings with bondholders and shareholders to reschedule debt payments, including loans worth up to 1.1 trillion won set to mature next year.
If the company fails to meet the deadline, it will fall under court receivership. But the company has made little progress in charter fee talks with foreign ship providers due to its unpaid fees.
The company also reportedly believes it is “almost impossible” to hold a shareholder meeting before the deadline due to difficulties setting up the ratio of the debt-equity swap or other debt-restructuring measures with no concrete progress in the charter fee talks.
Hanjin is reportedly seeking ways to extend the Aug. 4 deadline by a month, but an official from the creditors said they are unlikely to accept the proposal.
“For creditors to allow a month suspension, they need to be convinced that at least the company has a will for normalization,” the official said.
Sources close to the matter expect that the extension hinges on Hanjin Group’s decision to support its ailing shipping unit as demanded by creditors.
Source: The Korea Times
