Photo: Hanjin Shipping
By Joyce Lee and Hyunjoo Jin
SEOUL, Sept 6 (Reuters) – Hanjin Shipping’s parent firm plans to raise 100 billion won ($90 million) to fund the unloading of billions of dollars worth of cargo aboard vessels stranded around the world in the wake of its court receivership filing last week.
Those funds may be matched by a separate 100 billion won in loans that South Korean government officials have said government-backed creditors are ready to provide if Hanjin Group, the parent firm, provides collateral. Hanjin Group is considering the offer.
The collapse of the world’s seventh-largest container carrier has caused havoc in global trade networks and a surge in freight rates, as more than half of Hanjin’s ships have been blocked from docking with ports and lashing firms fearing they won’t be paid. Some vessels have also been seized.
Whether those funds would be sufficient to resolve cargo unloading problems was not clear. A spokeswoman for Hanjin Shipping was not immediately available for comment on the issue.
Hanjin Shipping, which many analysts and industry insiders expect eventually to be liquidated, had about 600 billion won in unpaid obligations such as charter fees and terminal use fees as of end-August. Its debt stood at 6 trillion won at the end of June and a bankruptcy would be the container shipping industry’s largest.
HP Inc, one of roughly 8,000 current Hanjin cargo owners, has tens of millions of dollars worth of computers and printers in more than 500 of the carrier’s containers, it said on Monday in documents supporting Hanjin’s U.S. bankruptcy filing.
“The ongoing disruption to HP’s supply chain caused by the Foreign Debtor’s bankruptcy filings is material, costly, and worsening on a daily basis,” it said.
A senior official at the U.S. government’s shipping watchdog has warned Hanjin, other shippers and freight forwarders against taking the opportunity to price gouge cargo customers.
William Doyle, one of five commissioners of the U.S. Federal Maritime Commission, told Reuters: “(Hanjin) was contemplating tying their containers to any release of cargo by basically making the sale of the actual container – at $1,500 per container – a condition for the release of cargo to shippers and cargo owners”.
As of late Monday, 70 Hanjin ships have been denied access to ports and three have been seized by creditors through court orders – one in Singapore and two in unidentified locations in China.
Hanjin has 141 ships, of which 128 are operating. Most are container ships although it has some dry bulk carriers. They are carrying cargo worth 16 trillion won, the Korea International Trade Association said on Monday.
For those on board the ships, there is little clarity on when they will be able to dock.
“We are waiting indefinitely. There is no word besides what we see on the news, that the government is making efforts for Hanjin Shipping. We are waiting for a call,” Park Kong-soon, captain of the Hanjin Atlanta, floating east of Tokyo Port, told Reuters by satellite phone.
He said the ship has about 10 days worth of meals and 20 days worth of other foodstuffs for its crew of 20.
Hanjin received court approval on Monday to spend funds essential to operating ships, such as food for crew members, and plans to supply seven vessels that urgently need supplies on Tuesday. Many vessels have months of supplies.
Although expectations that Hanjin Shipping will be able to survive are low, the stock surged 30 percent on Tuesday, the daily limit, as investors made speculative bets on a stock that hit an all-time low on Monday. The shares have lost 15 percent since news of the collapse emerged last week. ($1 = 1,103.6100 won)
(Additional reporting by Nataly Pak, Se Young Lee, Cynthia Kim, Lee Chang-ho, Yun Hwan Chae and Jeong-eun Lee in Seoul and Keith Wallis in Singapore; Writing by Tony Munroe; Editing by Muralikumar Anantharaman and Edwina Gibbs)
(c) Copyright Thomson Reuters 2016.
Sign up for our newsletter