Cash-strapped Hanjin Shipping Co. sources say that the negotiations with tonnage providers for lower rates are undergoing, but wouldn't say much else.
According to Korea Herald
, the country's No.1 shipping line has come under growing pressure from its creditors to secure more money to tide over a deepening cash shortage.
Hanjin Shipping 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.
Meanwhile, there are reports that Korean Air, a Hanjin Group affiliate
, is likely to help raise liquidity of up to 700 billion won (US$615.22 million) for ailing Hanjin Shipping.
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.
A large part will have to come from Korean Air, which had initially offered to provide 400 billion won.
This is because creditor banks have reiterated that they would not be providing any relief funds for Hanjin. The 1.1 trillion won is based on the assumption that Hanjin is successful in negotiations with foreign vessel owners for cutting chartering fees.
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.