Trading of Hanjin Heavy stocks suspended on KRX

TRADING of Hanjin Heavy Industries & Construction Co Ltd stocks have been suspended on the Korea Exchange (KRX) until end-March due to capital impairment, South Korean news agency Yonhap reported on Wednesday.

Yonhap said the shipbuilder reported losses ballooned to

1.32 trillion won ($1.18 billion) in 2018, from a

278 billion won loss in 2017. This was attributed to the continued losses from its Philippine affiliate, Hanjin Heavy Industries and Construction Philippines Inc. (HHICPhil), which operates a shipyard in Subic.

Yonhap quoted Hanjin Heavy as saying it expects its financial standing to improve once it implements debt-for-equity swaps with its creditors.

Busan-based Hanjin Heavy had built the shipyard in Subic in 2004, to take advantage of low wages in the Philippines.

However, a slump in the global shipbuilding industry caused new orders to dry up, adversely affecting Hanjin Heavy and HHIC-Phil’s operations.

HHIC-Phil is now under corporate rehabilitation. During a hearing at the Olongapo Regional Trial Court last Friday, HHIC-Phil said claims from banks, suppliers and other service providers reached over P48 billion as of Feb. 1.

The company is set to lay off over 3,000 workers on Feb. 15.