Hanjin gets extra funds to ease crisis

SEOUL: Hanjin Shipping Co Ltd is to receive as much as $100 million in additional funds to resolve the cargo crisis caused by its slide toward bankruptcy.

Hanjin’s lead creditor, Korea Development Bank, said yesterday that it would offer a credit line of 50 billion won ($45 million) to help the shipper unload cargo stranded offshore.

The announcement comes a day after Korean Air Lines’ board approved a 60 billion won ($54 million) loan to the troubled ocean shipping line.

Korean Air and Hanjin Shipping are part of Hanjin Group, one of the largest business conglomerates in South Korea.

Chairman Cho Yang-ho and former Hanjin Shipping chair Choi Eun-young earlier contributed a combined $44.6 million from their personal wealth to pay for unloading cargo on Hanjin’s container ships.

The state-owned bank said its credit line “will be used only when other available funds from Hanjin Shipping, Korean Air, the company officials and others are used up.’’

Even with the help of the bank, it was not clear if the new funds would be enough to solve the cargo crisis.

South Korea’s Yonhap News cited a South Korean court as saying that Hanjin Shipping needs 173 billion won ($157 million) to unload cargo at ports. Including fees for transporting cargo to final destinations, the company needs 270 billion won ($245 million).

Dozens of ships around the world have remained stranded for nearly a month since Hanjin’s Aug 31 bankruptcy filing because it couldn’t cover fuel bills or guarantee payment to dockworkers and others.

Some 31 of Hanjin’s 97 leased and owned container ships have completed unloading, as of yesterday. All chartered vessels have been ordered to be returned to their owners but dozens remain waiting at sea while funds are raised and protection from creditors is organised.

The crisis also left sailors trapped for weeks on those ships.