Hyundai Merchant Marine (HMM) has applied for self-rescue measures that could see the South Korean carrier co-managed by its creditors in the hope of getting the debt-ridden business back on track.
HMM’s creditors, led by state-run Korea Development Bank (KDB), will discuss the carrier’s self-rescue plan this week, and will decide whether to approve the proposal by the end of the month, the Yonhap news agency reports.
The shipping’s company’s maturing debts will be rolled over if the plan is approved, and some debts will be rescheduled. HMM’s debt ratio is around 1700%.
Hyundai Glovis, the logistics unit of car manufacturer Hyundai Motor, had been tapped to take over HMM, which is more than $5bn in debt, but Hyundai Motor said today it would not invest in the company.
HMM and KDB last week announced they will sign a voluntary agreement on March 29 that will extend the maturity of HMM’s principal and interest of debts with the bank by three months.
Separately, Kim Young-suk, minister of oceans and fisheries, told the The Korea Economic Daily the future of Korea’s shipping industry depends on maintaining its two major two Korean-flagged shipping companies, Hyundai Merchant Marine and Hanjin Shipping.
“Those two shipping companies have been playing a major role in Korean import and export as well as transshipment cargo. It is much more beneficial to maintain two major shipping companies than to reduce them to one by a forced merger,” the minister said in an interview on Sunday.
“If the companies get merged, file for court receivership or be sold to a third party, they will be completely dropped out from their global alliance, which is a strategic partnership among global shipping companies,” Kim added.
