By Nikita Mathur and Kyunghee Park

(Bloomberg) — Hyundai Merchant Marine Co., South Korea’s second-biggest transport firm, fell essentially the most in three months in Seoul buying and selling as traders apprehensive {that a} deliberate debt-for-equity swap would dilute their holdings.

Shares of Hyundai Merchant plunged as a lot as 19 %, the most important intraday decline since March 4, to fifteen,000 received. The inventory traded at 16,250 received as of 12:56 p.m. in Seoul. Hanjin Shipping, the nation’s greatest container liner, dropped as a lot as 9.2 %.

Hyundai Merchant will difficulty 236 million new shares to its creditor banks, bondholders and shipowners within the debt-for-equity swap as a part of a restructuring plan because it seeks to cut back liabilities and prop up its financials, in keeping with an organization submitting yesterday. The plan follows Finance Minister Yoo Il Ho’s name for restructuring within the transport trade as weak demand and dwindling money ranges damage the businesses.

“Investors are concerned about their shares being diluted after the debt-for-equity swap,” Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul, mentioned by telephone. “Hanjin Shipping investors are also concerned their shares will similarly be diluted as the company is also undergoing a creditor-led restructuring.”

Hanjin and Hyundai Merchant have submitted functions to collectors to restructure their debt. They have additionally been in talks with bondholders to influence them to take part within the creditor-led restructuring plan.

In April, the South Korean authorities mentioned it could additionally take steps to assist firms within the transport and shipbuilding industries, together with minimizing their debt. Hyundai Merchant may full talks to chop constitution charges on vessels it leased from shipowners this week, South Korea’s authorities mentioned Wednesday.

© 2016 Bloomberg L.P