Hanjin Shipping to return 38 ships by 2017

[THE INVESTOR] Ailing Hanjin Shipping has decided to return a total of 38 chartered ships to owners by 2017 as a part of its cost-cutting efforts.

The company, which was put under a creditor-led restructuring program, will return 18 chartered bulk carriers and 20 container vessels which have been a major drag on its balance sheet. 

“We hope to save significant costs from the return. We will put our utmost efforts to stabilize the financial health at the earliest,” an official at the firm said.

Of some 100 container ships that Hanjin Shipping operates, 63 are borrowed fleets.

Container carriers normally borrow their chartered ships again after contracts end for operation but Hanjin decided to give back the vessels as the firm has massive debts reaching 5.6 trillion won (US$4.7 billion) as of end-2015.

Last year, Hanjin Shipping posted a net profit of 3 billion won, a turnaround from a net 423.3 billion won loss in the previous year.

By Park Han-na (hnpark@heraldcorp.com)