Creditors May Give Breathing Room for Hanjin Shipping
State-run Korea Development Bank and other creditors are expected to extend their conditional debt rescheduling program for Hanjin Shipping Co. to stay afloat, reports Korea Herald.
This move will give the struggling shipping company enough time to cover liquidity shortage on its own. The ailing company still needs to raise about 1 trillion won ($875 million) to keep afloat.
According to sources, KDB may extend the initial Aug. 4 deadline by a month until early September. It is likely for the main creditor bank to vote for allowing more time for the shipper’s preparation, a person familiar with the situation said.
It is completely up to Hanjin Group to decide but the most practical way for now is the container carrier securing the additional funds through Hanjin Group, especially the group’s chairman, said a creditor bank official.
Earlier in May, the creditors decided to initiate a corporate rehabilitation program with conditions attached. Under the requirements, Hanjin Shipping has to cut charter fees, join the global shipping alliance and extend the debt maturity, among others.
Charter fee rate is the remaining hurdle for Hanjin Shipping as it is still negotiating with the foreign vessel owners to reduce rates.
The company announced the plans to raise about 411 billion won by selling its key assets and rights. Hanjin, however, is still short by 8 billion won, even if it successfully collects the proposed amount.
