In a bid to save Hyundai Merchant Marine (HMM) from sinking further down the liquidity slope, the chairwoman of Hyundai Group and her mother have been issued a total of 6 million new shares in HMM, which amounts to a total of US$24 million, according to IHS Fairplay.
Lee Paik Hoon, CEO of HMM, said: “Container and dry bulk shipping rates are at unprecedented lows and there is substantial excess capacity in the market with significant capacity to be added in the near term.
“Moreover, expectations of healthy growth in world trade have been frustrated by the dramatic compression of Chinese demand for raw imports as well as by a more general decline in economic growth worldwide, particularly in Europe and emerging markets.
“HMM has been particularly challenged by these developments and by the fact that the payment of charterhire at the rates called for by its timecharters has not only resulted in significant losses to date but guarantees that HMM will continue to incur substantial losses from the operation of its business – and this is so before taking account of debt service or other financing costs.
“As a consequence of this, and despite the implementation of drastic cost-cutting measures, HMM's liquidity position has continued to deteriorate to the point where it cannot continue to operate much longer without substantial relief from the shipowners which own and operate vessels timechartered to HMM and from its creditors.”
Hyundai Group said: “As a part of our additional self-help plans, Hyundai Group chairman Hyun Jeong-Eun and an affiliate person of HMM participate in KRW30 billion of capital increase to improve our financial status and to secure more liquidity.
“Chairman Hyun decided to donate her own money to show her responsibility as a major shareholder and a strong will that we are trying to normalise our management status in an early stage.”