Hanjin Shipping to get W100b from parent group

Near-bankrupt Hanjin Shipping looks set to get an injection of 100 billion won ($90.5 million) from its parent group, although the amount falls far short of covering its entire overdue balance that approaches 600 billion won.

Hanjin Group said Tuesday that it would provide the funds to the country’s largest container carrier which is facing disruptions in its freight handling worldwide due to overdue debt. 

It will provide 60 billion won in loans secured by the shipping unit’s stakes in overseas terminals such as Hanjin Long Beach. The remaining 40 billion won is to come from private assets of the group’s Chairman Cho Yang-ho.

Hanjin Shipping’s vessels have been stranded at sea and ports after it filed for court protection last week. The company has sought “stay orders” to courts in 43 countries to protect its vessels from being seized by debtors. On Monday, the Japanese court approved of the order.

As of Tuesday, 73 of 128 of Hanjin’s vessels have had their operations disrupted, with more expected to follow in the coming days, according to Hanjin officials.

The troubled shipper may get another 100 billion won in policy loans, as Korea’s government and the ruling Saenuri Party agreed Tuesday to provide collateralized loans as part of measures to minimize the aftermath of Hanjin’s collapse.

“Although the company needs over 600 billion won in belated debts and other overdue payments, (the government) will immediately provide the most urgent amount once the collateral is provided,” Rep. Kim Gwang-lim of the Saenuri Party said during the government-ruling party meeting over the Hanjin crisis.

The two parties also vowed to help the world’s seventh-largest container carrier get stay orders from courts in dozens of countries.

The ruling camp also decided to designate affected regions as “employment crisis areas” if needed. The designation will allow the regions to be eligible for one-year of special public subsidies and other benefits from the government.

Currently, the port city of Busan is considered to be most affected.

As of Tuesday morning, the saturation level of the Hanjin terminal at the Busan New Port reached 77.5 percent, nearing 80 percent of full saturation, due mainly to the cargo transportation issue. The average saturation level of other terminals remains at around 50 to 60 percent.

To alleviate the cargo transportation problem, the Maritime Affairs Ministry said it would offer incentives to other shipping companies for helping Hanjin’s transshipment cargo and cover the full cost of 10 billion won for transporting transshipment cargo between local terminals.

An alternative vessel from Hyundai Shipping is slated to arrive in Busan on early Friday. About 1,300 containers will be loaded and sent to Los Angeles, US.

Three other alternative ones are also scheduled to arrive later this month and head to the US.

Earlier this month, the government has vowed to urgently deploy Hyundai Shipping vessels to ease the cargo transportation issue.

By Lee Hyun-jeong  (rene@heraldcorp.com)