Hanjin Shipping Co. Secures Funding
Wednesday, September 28, 2016
Posted by: Kathleen Chaplick
According to the Wall Street Journal, “A New Jersey bankruptcy judge denied a bid from Hanjin Shipping Co.’s creditors to keep several of the South Korean carrier’s ships from leaving U.S. ports.” This decision allowed Hanjin ships floating just off the coast to port and unload thousands of containers filled with consumer goods.
Though ships are willing to dock, many shipping companies are turning away goods booked for export with the line. Cargo is also being held up due to ports, tugboat operators and cargo handling firms refusing to work, worried they will not be paid by the sinking company.
The Hanjin Shipping Co. is struggling to avoid liquidation and is currently working on a restricting plan that would involve reducing their fleet. This has been expedited due to a court order by a South Korean judge to cancel all charter agreements and return any chartered ship to their owners. The Korean government has made it clear they do not plan to bail the company out, forcing the shipping company to look towards shareholders and its parent company.
The Hanjin Group, parent company to Hanjin Shipping, transferred 40 billion won ($36 million) to fund unloading of the cargo on stranded ships. Korean Air, the top shareholder of Hanjin Shipping, approved a 60 billion won lending plan at a board meeting late Wednesday, saying it would secure the funds using Hanjin’s accounts receivable as collateral. Hanjin Shipping's largest creditor, the State-run Korea Development Bank, also opened a fresh credit line of up to 50 billion won ($45 million) for Hanjin. This was in case it needed extra funds to help resolve global disruptions to its cargo operations, according the Wall Street Journal.
For an update on Hanjin bankruptcy procedures, including Federal Maritime Commission (FMC) guidelines, click here.