Han­jin gets con­di­tional bailout

The Myanmar Times - - Business | International -

A KEY mem­ber of South Korea’s Han­jin Group has agreed to a con­di­tional bailout of the group’s ship­ping unit, whose col­lapse has sparked tur­moil world­wide on the high seas.

The board of group unit Korean Air, meet­ing for the third straight day, de­cided to lend 60 bil­lion won (US$55 mil­lion) to Han­jin Ship­ping, two-thirds of whose cargo fleet is ma­rooned at sea due to huge debts.

“The board de­cided to pro­vide the loan but only in ex­change for col­lat­eral [from Han­jin Ship­ping],” a com­pany spokesper­son told AFP.

It re­mained un­clear whether the badly in­debted Han­jin Ship­ping could pro­vide match­ing col­lat­eral.

The com­pany is seek­ing bank­ruptcy pro­tec­tion at home and in the US af­ter cred­i­tors re­jected its lat­est plan to deal with a $5.37 bil­lion debt.

Its bank­ruptcy would be by far the largest in the his­tory of con­tainer ship­ping, which is suf­fer­ing its worst down­turn in six decades be­cause of slump­ing global trade and a slow­down in China.

Han­jin Group an­nounced last week that it would in­ject 100 bil­lion won, in­clud­ing a per­sonal do­na­tion of 40 bil­lion won from its chair and big­gest share­holder Cho Yang-Ho, to help the ship­ping unit.

The re­main­der would come from Korean Air.

As of Septem­ber 9, 92 of the 141 ships be­ing op­er­ated by the world’s sev­enth largest ship­ping firm were stranded at sea.

They have been banned from dock­ing in the US, China and many other coun­tries un­til there are guar­an­tees of pay­ment for ser­vice firms and port work­ers.

The freight on the 92 ships is re­port­edly worth $14 bil­lion, the Cho­sun Ilbo daily said. Much of it is des­tined for US stores be­fore the Thanks­giv­ing and Christ­mas shop­ping spree.

Photo: AFP

The Han­jin Greece con­tainer ship is docked for un­load­ing at the Port of Long Beach, Cal­i­for­nia, on Septem­ber 10 af­ter be­ing stranded at sea for more than a week for fear that it could be seized by cred­i­tors if it came to shore. A Han­jin Ship­ping spokesper­son said a US court had is­sued an or­der al­low­ing it to un­load some cargo without fear of cred­i­tors seiz­ing its ships.

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