Hanjin Shipping pressed to raise more money to tide over cash shortage

Cash-strapped Hanjin Shipping Co. has come under growing pressure from its creditors to secure more money to tide over a deepening cash shortage, industry sources said Wednesday.

According to the sources, Hanjin Shipping, the country's No.1 shipping line, has proposed raising some 400 billion won ($353 million) via stocks sales to its affiliates, but creditors want the shipping firm to jack up the figure to some 700 billion won.

Hanjin Shipping needs some 1.2 trillion won over the next 18 months to pay back debt and do business. The company, however, claims that some 400 billion won would be enough if it succeeds in cutting charter rates and postponing debt repayments.

Hanjin Shipping, currently under a creditor-led restructuring scheme, has made little progress in its negotiations with owners of its chartered fleet to cut leasing rates, one of the key prerequisites set out by creditors to avert court receivership.

The shipping line is also seeking to postpone the repayment of 2.5 trillion won borrowed to buy container ships and other vessels by up to three years, which would help the shipper save billions of won.

As of end-2015, the company's total debt reached 5.6 trillion won.

In 2015, Hanjin Shipping posted a net profit of 3 billion won, a turnaround from a net 423 billion won loss in the previous year.

Creditors of Hanjin Shipping approved creditor-led restructuring for the shipper in early May, granting a three-month suspension on all payments of principal and interest.

But they gave the condition that the shipper should cut charter rates, win approval for debt recast from its bondholders, and join a global shipping alliance.

Hanjin Shipping has managed to win approval from bondholders for debt rescheduling and has joined a global shipping group. (Yonhap)