Hanjin crisis deepens, as debts profile hits $5.5 billion

Hanjin-ShippingSouth Korean largest container shipping line, Hanjin Shipping, is on the verge of bankruptcy, as the state run Korea Development Bank, put the shipper’s debt at $5.5 billion as at the end of June 2016.

Already, the bankruptcy of Hanjin Shipping Line has thrown ports and retailers around the world into confusion, with giant container ships marooned and merchants worrying whether tonnes of goods will reach their shelves.

The South Korean giant filed for bankruptcy protection last week and stopped accepting new cargoes. With its assets frozen, ships from China to Canada were refused permission to offload or take aboard containers because there were no guarantees that tugboat pilots or stevedores would be paid.

According to statistics from Vessle Value, Hanjin owns 63 vessels, worth $1.7 billion dollars (live and newbuilding contracts).

There are indications that the South Korea’s second largest container liner, Hyundai Merchant Marine (HMM), is interested in the takeover of Hanjin.

This is expected to bump up the combined fleet value of HMM and Hanjin to $2.7 billion. The merged Hanjin and HMM company would only rank 27th in the world in terms of fleet value, if the agreement is reached.

After the Hanjin Shipping, a member of the CKYHE Alliance, decided to file for court receivership, the remaining four members of the alliance have decided to cut all ties with the company .

These include; Shanghai-based shipping company; Cosco Container Lines; Japan’s Kawasaki Kisen Kaisha; Taiwanese Yang Ming and Evergreen Line. The joint ventures said that their cargo will not be loaded onto vessels operated by Hanjin Shipping, and added that Hanjin’s cargo will not be allowed to load on the vessels operated by the remaining four members of the alliance.

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