Hanjin Shipping Seeks Restructuring as Cash Dwindles
By Kyunghee Park
(Bloomberg) — Hanjin Shipping Co., South Korea’s greatest container provider that’s a part of the Hanjin Group, stated it’s going to work with lenders to restructure debt after years of weak demand resulted in losses and money erosion.
The delivery firm will submit an software to its collectors on Monday and can disclose particulars of the revamp plan as soon as they’re firmed up, it stated in a regulatory submitting Friday. Banks will evaluation the request rigorously earlier than deciding, state-owned Korea Development Bank, a key lender, stated in an e-mailed assertion.
Hanjin Shipping is the newest among the many nation’s liners recasting their debt after Finance Minister Yoo Il Ho stated the business must be overhauled following years of weak demand that eroded money at firms. Operators worldwide have been slashing their workforce and contemplating consolidation to stem losses as slowing international commerce and overcapacity squeeze transportation charges.
Shares of Hanjin Shipping fell a 3rd day earlier than the announcement, plunging 7.3 % to shut at 2,605 received in Seoul Friday, the bottom stage since they began buying and selling in December 2009. The inventory has tumbled 28 % this 12 months, in contrast with a 2.8 % acquire within the benchmark Kospi index.
Creditors to smaller rival Hyundai Merchant Marine Co. in March agreed to increase the maturity of its debt for 3 months because it negotiates with bondholders and shipowners to hitch the banks’ restructuring efforts.
Hanjin Shipping has been unprofitable for the final 5 years. Its money available fell 56 % from a 12 months earlier to 241 billion received ($211 million) on the finish of 2015, in accordance with knowledge compiled by Bloomberg.
The firm stated it has 389 billion received in bonds maturing this 12 months. Of the 238 billion received of securities due in June, it plans to roll over 48 billion received. Bank borrowings on the finish of final 12 months had been at 5.6 trillion received.
Hanjin Group, whose items embody Hanjin Shipping and Korean Air Lines Co., stated in 2013 that it plans to lift 3.5 trillion received by promoting shares and different belongings as a part of its efforts to scale back debt. Under the plan, Hanjin Shipping bought its bulk-shipping and a few terminal operations.
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