Hanjin Shipping facing bankruptcy

Hanjin Shipping bankruptcyContainer ships of Hanjin Shipping were arrested and sidelined in several ports worldwide, due to unpaid bills and statements of claim from creditors. Earlier this week the creditors of the South Korean container carrier denied to provide finance aid, which probably means that the Hanjin Shipping will bankrupt. The shipping operator was in advanced talks for the restructuring and improving cash flows by assets sale. However, the company failed to reach an agreement with creditors for the amount of assets sales and Korea Development Bank said in official statement that will terminated the provision of additional funding to the company from September 4.

The decision was followed by statements of claim from creditors and shipowners. AsiaLegal opened legal case against Hanjin Shipping for unpaid charter bills for container ship Hanjin Rome, which was later arrested in Singapore. Furthermore, companies Dalby Navigation, Regaby Navigation and Surby Navigation have submitted claims for 2.4 million USD, for unpaid charter bills for container ships Hanjin Milano (4250 TEU), Hanjin Duesseldorf (4250 TEU) and Hanjin Montevideo (4250 TEU).

Hanjin Shipping filed for judicial protection against bankruptcy in Seoul Administrative Court. Management is expected to be taken by syndics. The company has debt of over 5 billion USD and low liquidity, which hampers their repayment. Currently, the shipping operator is in talks with the government, looking for an option to restructure the debt and restart operations. South Korea’s Minister of Finance told local media that the government will make every effort to limit the impact on the local economy.

Meanwhile, container ship Hanjin Sooho was stopped from entering in Port of Shanghai, as creditors sought to have ports either deny entry or impound Hanjin-operated ships. However, finally the vessel was docked at the Shanghai Shengdong International Cont Terminal and sidelined there, cancelling next voyages. The container ship Hanjin Europe was sidelined in Hamburg due to unpaid bills to the terminal operator. The container ship Hanjin Chennai is drifting in South China Sea southeast off Con Dao Archipelago, Vietnam, waiting for development of company’s bankruptcy.