AUGUST 31, 2016 — South Korea's largest container shipping company, Hanjin Shipping Co. filed for receivership in Seoul Central District Court today.
The filing underscores the pressures facing shipping companies world wide. With 132 containerships and bulkers in its fleet, 59 of which it owns, Hanjin Shipping is the world’s seventh-biggest shipping line by capacity according to consultancy Alphaliner.
The company filed for receivership the day after creditors refused to continue with the Seoul Central District Court came just a day after the company's creditors discontinued providing a lifeline after financial assistance of more than 1 trillion won ($896 million) failed to keep it afloat.
The Yonhap news agency says that the South Korean government will prod Hyundai Merchant Marine Co. into acquiring some of Hanjin Shipping's assets, a move that Yonhap says as seen as a prelude to a de-facto merger of the two.
Yonhap reports Jeong Eun-bo, vice chairman of the Financial Services Commission (FSC), as described the idea as intended to stop the country's shipping industry from losing competitiveness.
Hyundai Merchant Marine has had plenty of problems of its own. It is now controlled by creditors led by the state-run Korea Development Bank.
Yonhap reports Korea's maritime ministry as saying earlier in the day that it will work to help smooth flows in cargo trade for local exporters and importers by putting in substitutes for Hanjin vessels that may be seized by its creditors or reclaimed by charterers.