(LEAD) Hanjin Shipping stocks plummet on receivership filing
All News 14:06 September 05, 2016
(ATTN: UPDATES share price in para 2; ADDS more details in last 4 paras)
SEOUL, Sept. 5 (Yonhap) -- Stocks of Hanjin Shipping Co., South Korea's top container shipping line and the world's seventh-largest, plunged on Monday after it filed for court protection last week stoking concerns that it may be liquidated on worsening business conditions.
Hanjin Shipping was trading at 1,115 won on the Seoul bourse as of 1:48 p.m., down 10.08 percent from the previous session's close, after dipping by the daily permissible limit of 30 percent.
The trading of the shipper has been halted since Tuesday. On Wednesday, the shipper applied for receivership in South Korea after its creditors, led by the state-run Korea Development Bank rejected its latest self-rescue plan.
Since late last month when creditors signaled they would cut off financial help to the beleaguered shipping firm, Hanjin Shipping's vessels have been denied access to ports worldwide as lashing companies and port workers refused to work out of concerns that they would not be paid. Also, some of its ships have been seized by its creditors.
Hanjin Shipping has been striving to cut its chartered rates and extend the maturity of debts in the face of worsening financial health stemming from a continued fall in freight rates.
According to Hanjin, 78 out of its 128 vessel fleet have been stranded in seas off China, Australia and the United States.
Hanjin Shipping's receivership filing has caused chaos in the global shipping sector and freight rates surged sharply as retailers scrambled to find alternatives for Hanjin-operating routes.
On Sunday, the South Korean government said it will take a set of additional measures to ensure there are no delays or disruption to the flow of cargo caused by the Hanjin fiasco.
Earlier, the government said Hyundai Merchant Marine Co., the country's No. 2 shipper, plans to deploy 13 ships on Hanjin Shipping-operated routes.
Four Hyundai ships will replace Hanjin's American region fleet and nine other ships will be used on the European route, it said.
Hyundai Merchant Marine, currently under a creditor-led debt restructuring scheme, may seek to take over Hanjin Shipping's healthy assets, such as port terminals and global business networks.
A local court has ordered the shipper to submit its self-rehabilitation plan by Nov. 25.
Meanwhile, Hanjin Shipping plans to seek protection in many countries from its ships being seized by its creditors and ease potential disruption of cargo flow.
Hanjin Shipping, which has already asked for a stay order in the U.S. last week, plans to expand the move into some 10 countries such as Canada, Germany and Britain.
Earlier in the day, South Korea's top financial regulator pressed Hanjin Group, the shipper's parent, to take full responsibility for the shipping chaos.
Yim Jong-yong, chairman of the Financial Services Commission (FSS), described the handling of the freight stranded at sea as the "most urgent and difficult" issue at present.
sam@yna.co.kr