Korea Development Bank (KDB), the lead creditor of Hanjin Shipping Co Ltd, yesterday said it would offer a 50 billion won (US$45.36 million) credit line to help Hanjin unload stranded cargo.
An estimated US$14 billion of cargo was trapped on Hanjin ships when the world’s seventh-largest container carrier collapsed late last month, creating havoc ahead of the crucial holiday shopping season.
The credit line is to be used only when all available funds — from Hanjin Shipping, top shareholder Korean Air Lines Co, Hanjin Group’s chairman and a former Hanjin Shipping chairwoman — meant to help unload cargo are used up, KDB said in a statement.
Photo: Reuters / Moon Kwon-do
Korean Air, Hanjin Shipping’s largest shareholder, late on Wednesday agreed to lend 60 billion won to help unload cargo.
The airline’s loan is in addition to 40 billion won provided by the Hanjin Group’s chairman, and 10 billion won provided by the former Hanjin Shipping chairwoman.
KDB’s credit line, like Korean Air’s loan, also takes Hanjin Shipping’s accounts receivables as collateral, KDB said in a statement.
However, KDB’s loan is to take higher priority than Korean Air’s claim, and the funds are not meant to support Hanjin Shipping as a company, but to address cargo delays, KDB said.
Even with KDB’s credit line, the total is still well short of the 270 billion won Hanjin estimates it needs to clear all the cargo, a Seoul Central District Court judge said yesterday, citing the company’s most recent figure submitted to the court.
Thirty-one of Hanjin’s 97 leased and owned container ships have completed unloading, Hanjin Shipping data showed yesterday.
All chartered vessels have been ordered to be returned to their owners, but dozens remain waiting at sea while funds are raised and protection from creditors is organized.
With debt of about 6 trillion won at the end of June and the Seoul’s unwillingness to mount a rescue, expectations are low that Hanjin Shipping will survive.
One opposition lawmaker angrily criticized the government in parliament yesterday 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,” South Korean Minister of Finance Yoo Il-ho said.
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