SEOUL: Hanjin Shipping Co's parent firm plans to raise 100 billion won (US$90.46 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.
Hanjin Group, the parent of Hanjin Shipping, will raise 60 billion won while Hanjin Group chairman Cho Yang-ho will contribute 40 billion won from private funds, the group said in a statement on Tuesday.
South Korea's 11th-largest conglomerate said the funds are being raised to "normalise the unloading of Hanjin Shipping's containers" to "minimise the damage to exporters and importers".
The funding is separate from the roughly 100 billion won in loans that three South Korean government officials said government-backed creditors are ready to provide if Hanjin's parent provides collateral.
Even if both funding packages come to fruition, the sums will still be far short of what Hanjin Shipping, the world's seventh-largest container carrier, needs to stay afloat.
Hanjin Shipping had about 600 billion won in unpaid obligations such as charter fees and terminal use fees as of end-August, before a South Korean court approved its court receivership, South Korea's maritime ministry said.
Its debt stood at 5.6 trillion won at the end of 2015, and a bankruptcy would be the container shipping industry's largest.
The funding plan unveiled on Tuesday aims to "alleviate a logistics crisis rather than normalising the shipper overall," Kang Sung-jin, an analyst at KB Investment & Securities, said in a report, adding that it will be difficult for the shipper to survive.
Hanjin Shipping shares jumped as much as 28% on Tuesday morning before trimming their gains to be up 20% at midday. They had hit a record low on Monday.
Hanjin Shipping's collapse last week has caused chaos in global trade networks and a surge in freight rates, as ports and vendors refused to provide services to Hanjin vessels for fear they won't be paid.
"We were barred entry outside the port, so we are floating east of Tokyo port," Park Kong-soon, captain of the Hanjin Atlanta, which has a crew of 20, told Reuters by satellite phone.
He said the ship has about 10 days worth of meals and 20 days worth of other foodstuffs.
"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 said.
BARRED FROM PORTS
Hanjin Shipping said that as of late Monday, 73 of its ships were seized or denied access to ports, comprised of 66 container ships and 7 bulk carriers. This includes three ships seized by creditors through court orders, up from one, a Hanjin spokeswoman said.
The three ships include the Hanjin Rome in Singapore as well as two other container ships in unidentified locations in China, seized through Chinese court orders, the spokeswoman said.
Hanjin has 141 ships, of which 128 are operating.
The Hanjin spokeswoman could not explain the discrepancy between its numbers, and the 79 Hanjin ships South Korea's maritime ministry said were denied port access yesterday.
Hanjin vessels were carrying cargo worth 16 trillion won belonging to some 8,300 cargo owners, the Korea International Trade Association said on Monday.
Last month, Hanjin Group submitted a plan to creditors pledging to raise up to 500 billion won for the troubled shipper, which its lead creditor, state-run Korea Development Bank, deemed inadequate. - Reuters
Subscribe now and receive FREE sooka plan for 1 month.
T&C applies.
