Hanjin Shipping Bondholders Okay Debt Freeze
South Korea's largest shipping line Hanjin Shipping said bondholders agreed to extend the maturity of Won35.8bn ($30.1m) in debts by four months to September 23 this year, in a major step to help the company avoid bankruptcy.
According to a report in the Korea Herald, during a meeting on Thursday, bondholders gave the nod to the firm’s proposal, marking a good start to meeting one of the conditions for its creditor-led restructuring.
On May 5, creditors of the Cash-strapped Hanjin Shipping agreed to offer financial assistance to the company and initiate a corporate rehabilitation program with conditions attached.
The debt maturity extension was part of conditions that include a cut in charter rates and an inclusion in a global shipping alliance.
The country's shippers have been suffering from ballooning debts and mounting losses due mainly to a worldwide slump in the industry.
“Upon this approval, the company will put an utmost effort to move toward normalization,” a Hanjin Shipping’s official said.
Completing negotiations with foreign ship owners over a cut in charter rates is the last remaining hurdle for the shipper to meet creditors’ requirements.
The company reached an agreement to set up a new alliance named The Alliance along with five shippers including Germany’s Hapag-Lloyd, Japan’s NYK and Taiwan‘s Yang Ming last week.
