The chaos wrought by Hanjin Shipping’s court receivership – container shipping’s largest ever bankruptcy – stepped up a notch today with sister company Korean Air stepping back from earlier promises to pump KRW60bn ($54.7m) in emergency money to at least get all cargoes off the shipping line’s stranded fleet.
Parent of both airline and shipping line, Hanjin Group, had earlier in the week promised KRW100bn in emergency funding for the line with KRW60bn coming from Korean Air and the remainder from the group’s owners, the Cho family. However, the board at the airline failed to reach agreement on the payment today. They will meet again tomorrow.
The cash shortfall comes also as lead creditor Korea Development Bank (KDB) has pulled back from injecting further funds into the ailing company, putting it on the brink of extinction.
The delay in rescue funding has placed Hanjin’s cargoes bound for the US at risk as the US bankruptcy court on Tuesday issued a provisional injunction for Hanjin ships calling at American ports until the line submits persuasive payment plans. The final hearing is due on Saturday in Korean time. Hanjin had previously earmarked Los Angeles as a place to unload stranded boxes.
How Hanjin’s parent, creditors and the government have handled the receivership of the line has been criticised heavily by analysts Alphaliner in a recent report. The French firm said the failure to act quickly had done irreparable damage to the Korean carrier’s reputation and any talk of a merger with Hyundai Merchant Marine (HMM), or another ‘white knight’, is now very unlikely given its financially ruinous situation.
Separately, representatives of the US Department of Commerce have met with South Korea’s oceans and fisheries vice minister Yoon Hag-bae and asked the Korean government to step in to prevent further delays in shipments to the US. Tales of supply chain chaos across the world continue to flood into Splash with discussion at our interactive forum Splash Chat throwing up many intriguing developments in what has become the shipping news story of the year.