Hanjin Shipping Co, the South Korean container line that sought bankruptcy protection last month, received a court advisory to return all chartered vessels to cut costs while the company is in the midst of reducing its fleet.
Giving the ships back to the owners makes sense as they were chartered at high rates, a spokesman at the Seoul Central District Court said yesterday, declining to be identified in accordance with court practices.
Hanjin estimates it might face penalties of about US$1.7 billion for the early return, but the contracts could be renegotiated if the company is revived, the spokesman said.
Hanjin declined in an e-mail to comment on the court’s recommendation.
The district court is hearing Hanjin’s application for receivership and will decide whether it can be resuscitated or should be liquidated.
A collapse of the firm will probably spark fresh consolidation among container lines as they attempt to ride out shock waves faced by the industry, Germany’s No. 1 carrier Hapag-Lloyd AG said last week.
Hanjin has already returned four box movers and three bulk carriers to their owners, and plans to remove 13 more container carriers, the company said in an e-mail earlier yesterday.
In addition, one ship owner has informed the company that it plans to take back a container ship.
Of the Seoul-based liner’s 97 container ships, 60 were chartered, while among its 44 bulk ships, 23 were leased as of Sept. 11.
The bankruptcy filing by the South Korean company, which controlled 2.9 percent share of the global container ship traffic, threw supply chains in turmoil during peak season when retailers look to stock up warehouses and shelves to prepare for the year’s biggest holiday sales — Thanksgiving and Christmas.
About 30 percent of Hanjin’s container ships have completed unloading, according to the company’s Web site, while 34 are still stranded at sea and 35 are to return to South Korea.
In a setback to revival efforts, the board of Korean Air Lines Co, the biggest shareholder of Hanjin, failed to reach a resolution when it met pm Sunday to discuss ways to expedite the injection of 60 billion won (US$54 million) it had pledged earlier.
The board of the airline plans to meet again, but has not settled on a date, a Korean Air spokesman said.
The airline is discussing new measures to ease the disruption, Yonhap News reported yesterday, citing people it did not name.
The Wall Street Journal reported on Friday that Hanjin is working on a plan that requires more than halving its fleet, and the most likely scenario is that it will be liquidated.
The nation’s Financial Services Commission had on Sept. 1 said the possibility of liquidation cannot be ruled out.
A representative for Hanjin declined to comment.
Shares of the company dropped 1.9 percent to close at 1,260 won in Seoul yesterday. The stock has slid 65 percent this year, compared with a 2.8 percent gain in the benchmark KOSPI.
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