Hanjin Shipping has announced that it is seeking court receivership after its creditors refused it self-rescue plan, with ports in China and Spain denying access to its vessels, reported Reuters.
The court will decide if the company will survive or become bankrupt; if it is to become bankrupt it will be the largest capacity bankruptcy for a container shipper, and the process is expected to take less time than the usual of two months.
Yoo Il-ho, Deputy Prime Minister and Strategy and Finance Minister of South Korea, said: “The government will swiftly push forth corporate restructuring following the rule that companies must figure out how to survive and find competitiveness on their own while taking responsibility.”
The shipping industry has suffered a downturn in recent times, with H1, 2016 revenue for many companies down by around 18%; shipping companies have been forced to try and cut costs, with many opting into vessel sharing agreements..
Hanjin had debts of around US$5 billion at the end of 2015, and was recently given a year to repay more than$1 billion.
It had developed a self-rescue plan that, although falling just short of this number, would ensure the continued support of its creditors.
One of Hanjins main creditors, the Korea Development Bank, had released the statement that “There are no differences between the previous self-rescue plan and the new one,” and that Hanjin would have to try and save themselves from liquidation.
