Hanjin Shipping to file for receivership

Cash-strapped Hanjin Shipping Co. said Wednesday that its board has decided to file for court protection later in the day as its creditors decided not to extend an additional support.

On Tuesday, the creditors, led by the state-run Korea Development Bank, reached a consensus that they would not infuse additional cash into the country's No.1 shipping line.

A creditor-led restructuring scheme for the largest South Korean shipper is set to end Sept. 4.

The creditors have been ratcheting up pressure on the world's seventh-largest shipping line to roll out stronger self-rescue plans with a threat to put it under receivership.

But Hanjin Shipping's latest restructuring scheme centered on an infusion of 400 billion won ($357 million) from its largest shareholder, Korean Air Lines, fell short of the demands of creditors, which have asked for at least 600 billion won.

Hanjin Shipping has been striving to cut its chartered rates and extend maturity of debts in the face of its worsening financial health stemming from a continued fall in freight rates (Yonhap)