South Korean owner Heung-A Shipping has applied to start a debt restructuring in an effort to solve its debt crisis.
The board of the company has approved a debt restructuring scheme by its main creditor Korea Development Bank. Under the scheme, creditors will take control of the company and come up with measures to help the company stay afloat. Heung-A Shipping is hoping the restructuring would improve its financial situation and normalise business operations.
Heung-A Shipping, the fifth largest shipping company in South Korea, has been suffering consecutive losses since 2016. The company reported a net loss of KRW38.2bn ($32m) for the first three quarters of 2019, widened by nearly 50% year-on-year.
The company has been taking a series of measures to improve its financial status in the past couple of years, including selling a 90 percent stake of its container shipping business to compatriot owner Sinokor Merchant Marine last year.
Fairmont Partners, the controlling shareholder of Heung-A Shipping, failed to sell a 14.3% stake of Heung-A shares to Caris Kukbo last year.
Currently Heung-A Shipping operates 19 tankers.