Ever Given Owners Make New Offer To Suez Canal Authority
ISMAILIA, Egypt June 20 (Reuters) – The owners of a container ship that blocked the Suez Canal in March have made a new offer in a compensation dispute with the...
By Kyunghee Park
(Bloomberg) — Hyundai Merchant Marine Co., South Korea’s second-biggest shipping company, plans to write down its capital by 86 percent after losses mounted from excess capacity, and weak global demand led to a plunge in shipping rates.
Hyundai Merchant will reduce its capital to 173.2 billion won ($143 million) from 1.2 trillion won as of April 21 to help improve its balance sheet, the company said in a regulatory filing Thursday. It will seek approval from shareholders at a March 18 meeting.
After posting losses in five of the past seven years, Hyundai Merchant has been selling assets in an effort to reduce debt that amounted to almost 800 percent of its equity. Shipping lines worldwide have been selling assets, cutting workers and considering consolidation to stem losses as years of slowing global trade and overcapacity eat into shipping rates.
Trading of Hyundai Merchant shares will be halted from April 20 to May 4, and will resume May 6, the company said in a statement to the stock exchange in Seoul.
Hyundai Merchant received 100 billion won earlier this year, including 30 billion won from Chairwoman Hyun Jeong Eun, to shore up its finances. The company also is in talks to lower charter rates on vessels it leased from shipowners and is seeking to restructure its debt so it can secure financial support from creditor banks.
Shares of Hyundai Merchant gained 3.4 percent Thursday, closing at 3,160 won before the announcement. The stock has dropped 66 percent in the past 12 months, making it the third-worst performer on the Kospi 200 index.
Rates to ship cargo to Los Angeles from Hong Kong were $718 per 40-foot container at the end of last year, 64 percent lower than a year earlier, according to data provided by Drewry Shipping Consultants.
© 2016 Bloomberg L.P
Join the 70,438 members that receive our newsletter.
Have a news tip? Let us know.