Amid speculation that Hyundai Merchant Marine Co. (HMM) may go into court receivership, the financial authorities and creditors will try to make it a subsidiary of Korea Development Bank (KDB).
South Korea’s finance minister
Yoo Il-ho said that HMM,one of Korea’s vulnerable industries that needed downsizing, will face court receivership unless it can cut its charter payments to fellow owners.
After much consideration, financial authorities and creditors concluded that they cannot drive HMM to receiving a court receivership, say sources in HMM’s creditors.
Sooner or later, they will come up with measures to promote HMM’s management normalization, including creditor financial institutions’ debt-for-equity swap and additional supports.
Hyundai Merchant has been reeling from a snowballing debt. Last year it posted 253.5 billion won (221.0 million US dollars) in operating losses amid a protracted slump in the shipping industry.
Meanwhile, foreigners have sharply reduced their holdings of exchangeable bonds (EBs) issued by the financially troubled HMM to avoid bigger losses.