Court receivership for embattled Hyundai Merchant Marine (HMM) is likely to be announced this week as charter negotations with tonnage providers have failed to achieve the results its creditors had sought.
HMM was told in February that it had two months to get costs down on its chartered in fleet by 30% – a crucial first hurdle set up by creditors, led by Korea Development Bank (KDB) to see if HMM was worth saving. The tonnage providers – including Danaos, Navios and Eastern Pacific – have failed to acquiesce.
South Korea’s Financial Services Commission (FSC) said in a statement today: “To extend the charterhire renegotiations indefinitely would also hold up HMM’s restructuring, and this is not viable. We thus took the decision to call off the negotiations.”
The FSC added: “The failure to secure a discount in charter rates means that realistically, it would be difficult to facilitate the normalisation of HMM’s operations.”
HMM will meet with its bondholders at the end of the month in a bid to extend repayments.
Watching on nervously from the sidelines is Hanjin Shipping, which last month was given the same charter ultimatum from creditors – and more galling, some of Hanjin’s tonnage providers have already publically stated they will not give in to Hanjin’s charter requests.