Sinking Hanjin stocks volatile after trading resumes

SEOUL: Shares in South Korea’s foundering shipping giant Hanjin were volatile Monday after it filed for bankruptcy protection in Seoul and the US, rocking the troubled maritime freight industry.

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 US$5.37 billion (RM21.8 billion) debt.

Hanjin’s bankruptcy would be by far the largest in the history of container-shipping, which is suffering from its worst downturn in six decades.

Holed beneath the waterline by slumping global trade and slowing growth in China, more than half of its fleet – 79 vessels – is either stuck in port or unable to dock, with authorities fretting the company will not be able to pay its bills.

South Korean regulators allowed share trading to be resumed yesterday after Hanjin’s court receivership was granted, but the share price plummeted by the daily limit of 30% shortly after the market opened.

The issue recovered to be just 1.6% lower at one point but soon fell back and ended at 1,070 won (RM3.94), down 13.7%. The stock is now more than 40% off from a month ago and 80% down over the year.

Seoul-listed Hyundai Merchant Marine – which could buy some of its rival’s assests – fell 3.6%.

Under the receivership, the court will review the firm’s financial conditions and a revival plan to decide whether to put it under a court-led recovery programme or to declare it bankrupt. Hanjin is required to submit its plan by Nov 25.

The company also filed for bankruptcy protection in the US last Friday to protect its vessels from being seized by creditors. If the filing is recognised, the court will block creditors in the US from seizing the company’s assets or launching other legal actions while its other bankruptcy proceedings are under way.

Nearly 80 Hanjin vessels have been either seized or denied cargo handling or docking at ports in countries including the US, China, Japan, Spain and Canada, South Korea’s government said yesterday. – AFP