In mid-September, the financially troubled South Korean container line Hanjin Shipping Co, the seventh largest container line in the world, was given a deadline extension from the Seoul Central District Court to submit a rehabilitation plan.
The court moved the date of the first meeting to discuss the future of the line from Nov 11 to Dec 9 and after this first meeting, the company is due to submit a new rehabilitation plan. As reported in last month’s Sea Breezes, the Hanjin Shipping Co, of Seoul, decided to file for court receivership on Aug 31 after the company’s creditors, led by Korea Development Bank, said they would not provide additional financial support to the Hanjin Shipping Co starting from Sept 4.
The Hyundai Merchant Marine (HMM), also of Seoul, is expected to acquire the Hanjin Shipping Co’s core assets, including its ships. Also in mid-September, the Hanjin Shipping Co received a cash injection from the head of its parent company, the Hanjin Group, as well as from its former chief.
The line reportedly received some KRW 40bn (US$35.5mn) from Cho Yangho while the former chief Choi Eunyoung contributed around KRW 10bn. in personal assets. Cho Yang-ho’s cash injection was part of the company’s earlier announced plan to raise KRW 100bn to fund the unloading of cargo which was stranded on Hanjin’s vessels.
The Hanjin Group said it would raise KRW 60bn, while its chairman would provide the rest from private funds. This move was made after a number of ports refused to service the Hanjin Shipping Co’s vessels, leaving the ships and their cargo, stranded outside of ports. By Sept 15, fears of capacity shortages created by the Hanjin Shipping Co crisis had faded, as some nine extra sailings were being made that month on the Asia-US West Coast route with a further six sailings then planned for October, according to the maritime analysts Alphaliner.
On the Asia-Europe route, only one extra sailing was mounted while plans by HMM to add one full Asia-Europe string had to be scaled down due to weak demand.
Alphaliner said spare capacity allowed Hanjin’s former CKYHE partner carriers to shift volumes on other existing Asia-Europe services. Hanjin’s partners on other affected sectors moved to replace Hanjin’s tonnage with their own ships on their jointly operated services.