Despite numerous sources of credit, Hanjin Shipping is still short of 270 billion won to unload all of its cargo. The non-unloading of its cargo is likely to impact the upcoming holiday shopping season.
In a development that could act as a helping hand to embattled shipper Hanjin Shipping Co Ltd, Korea Development Bank, (KDB) its lead creditor has stated that it will offer a $45 million (50 billion won) credit line in order to help it unload its stranded cargo.
Cargo worth $14 billion is trapped on its ships. Unless it is unloaded it could impact the upcoming holiday season.
According to Korean Air Lines, Hanjin Shipping’s top shareholder, the line of credit will only be used when all its available funds have been utilized.
Late on Wednesday, Korean Air Lines has agreed to lend 60 billion won to help unload the cargo.
This loan amount is in addition to the one provided by Hanjin Group’s chairman, and 10 billion won provided by the former Hanjin Shipping chairwoman.
In a statement, KDB has clarified that its line of credit also takes Hanjin Shipping’s accounts receivables as collateral. Significantly, its funds are not meant to support Hanjin Shipping as a company but to address its cargo unloading operations, said KDB.
Despite this line of credit, Hanjin Shipping is still far short of the 270 billion won needed to clear all its cargos, said a Seoul Central District Court judge, citing the company’s most recent figure submitted to the court.
According to Hanjin Shipping’s data, already 31 of its 97 leased and owned container ships have completed the unloading of their cargo. All of its chartered vessels have been ordered to return to their owners. Dozens however still remain at sea while funds are being raised and protection from creditors is being sought.
Straddled with debts of nearly 6 trillion won as of June 30 this year, the expectations of Hanjin Shipping surviving this crisis is low.
Back home in Seoul, an opposition parliamentarian has already angrily criticised the government for not stepping in to save the company.
“It is heartbreaking that our biggest shipping company is in this situation, but we believed it would create a bigger problem if we started using taxpayers’ money to resolve this problem,” replied Yoo Il-ho, Seoul’s Finance Minister in response.
($1 = 1,099.9000 won)
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