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Danaos reveals $560m exposure to Hanjin

Danaos Corporation is “disappointed” about the demise of Hanjin Shipping, which filed for receivership this week, and to which the Greek shipowner currently has eight containerships on charter.

The owner said the eight vessels’ timecharter contracts represent approximately $560m or around 20% of its $2.8bn contracted revenue backlog as of June 30, 2016.

Research by Deutsche Bank, published in April, revealed that Danaos is the shipowner with the greatest exposure to Hanjin.

“We are disappointed that the Korean Development Bank has failed to support an important participant in the global containership business,” Dr. John Coustas, CEO of Danaos, said in a statement.

“Danaos actively supported Hanjin in its efforts to restructure its operations and we are hopeful that Hanjin will be able to achieve a restructuring of its business and emerge from court receivership as a financially stronger company. We will closely monitor the process and seek to preserve the value of our assets for the benefit of our shareholders.”

The South Korean carrier accounted for 17% of Danaos’ revenue during its fiscal year 2015, according to NYSE-listed shipowner’s year-end report.

The vessels under charter to Hanjin are the 10,100-teu post-panamax containerships Hanjin Italy, Hanjin Germany and  Hanjin Greece; and the 3,400-teu panamaxes Hanjin Constantza, Hanjin Algeciras, Hanjin Buenos Aires, Hanjin Santos and Hanjin Versailles.

Danaos has five credit facilities for a combined $424.8m that are secured against vessels chartered to Hanjin and to Hyundai Merchant Marine (HMM), with whom the owner renegotiated charter rates at a 20% reduction last month. Together, Hanjin and HMM accounted for 45% of Danaos’ revenues during the fiscal year 2015.

Danaos did not respond to enquiries by Splash as to Hanjin’s bankruptcy and the lower payments from HMM would affect its ability to meet the requirements of its loan covenants.

Some $274.3m was outstanding under the five credit facilities as of December 31, 2015.

Splash will be providing continued updates on the Hanjin upheaval. To view our full archive on container shipping’s largest ever bankruptcy, click here.

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Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.

Comments

  1. Coustas will inevitably recognise the value of diversification
    These companies are short of talented people specialising on RM or what?
    it doesn’t take to be a rocket scientist to know that you can’t put all your eggs in one basket, even old [but good] jazz musicians knew that

  2. Danaos, Nothing personal. But When Korea Development Bank, (KDB) Put a Loaded Gun to Hanjin Head, Hanjin Executives, & Family Had, Had Enough of Selling Profitable Division, To Stay In Business over the Past Two (2) Years On Even Keel. If Anything, Korea Development Bank, (KDB) JUST SCREWED EVERYONE: Global Clients, Ship Crew, Ships Officers, Shipping Agents, Other Ship Owners, Charters, Docking Facilities, Bunkers Clients, Ect, Ect, Ect.. NEXT on Chopping Block: Hyundai Merchant Marine, Just Missed $2B dollar Payment For September 1, 2016 To Its Lender: OOPS, Korea Development Bank, (KDB) Feel good don’t it! Now who is getting screwed!

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