Beleaguered Hanjin Shipping has received some welcome news in the form of much needed emergency funding to help offload stranded cargoes around the world. However, the amount of additional funding coming its way is no where near enough to save it. Hanjin Shipping became container shipping’s largest ever bankruptcy when it filed for court receivership at the end of last month.
Hanjin’s largest shareholder, Korean Air, has finally agreed to expedite KRW60bn ($50m) in new loans to go alongside KRW40bn sent by parent Hanjin Group’s chairman.
Moreover, reports are emerging from South Korea that state run Korea Development Bank, under pressure from Korean manufacturers who have seen their supply chains thrown into the air following the court receivership announcement, is willing to backtrack and offer some additional funding.
The bank is now understood to be mulling an emergency loan of KRW50bn. Nevertheless, even if this came through, the combined loans of KRW150bn fall way short of what the KRW600bn South Korean government has estimated Hanjin will need to cover unpaid costs such as fuel and cargo handling.
Attention is now turning to the financial health of the shipping line’s parent, Hanjin Group.
South Korea’s financial regulatory agency has ordered local banks to scrutinise the general state and size of loans that they gave out to Hanjin Group.
The Financial Supervisory Service said the move is intended to assess the overall fiscal soundness of Hanjin Group.
“Following the fall of Hanjin Shipping, we felt the need to observe the credit conditions of the group,” an agency spokesperson told local media.
Hanjin Group had borrowed a total of KRW8trn ($7.14 billion) from local banks up to the end of last month, of which KRW3.5trn went to bust Hanjin Shipping.
Finally, in today’s Hanjin roundup, compatriot line Hyundai Merchant Marine (HMM) outlined its plans to deploy replacement vessels on Asia-Europe from September 29, having already kicked off additional services on the transpacific. A 4,000 teu ship will head to China on September 29 and on to the Mediterranean and North Europe to help fill the void left by Hanjin’s demise.