Hanjin Shipping Co.’s owner will provide 100 billion won ($90 million) as part of efforts to contain disruptions to the global supply chain stemming from the container line’s court-receivership filing. Shares of South Korea’s largest shipping line jumped by the daily 30 percent trading limit.
Hanjin Group chairman Cho Yang Ho will supply 40 billion won, the group said in an e-mailed statement Tuesday. Separately, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won of loans at a low interest rate to the shipping line if Hanjin Group provides collateral, Saenuri lawmaker Kim Gwang Lim said in a statement.
South Korea’s Ministry of Oceans and Fisheries estimates Hanjin Shipping needs more than 600 billion won to cover unpaid costs like fuel, including about 100 billion won immediately for payments such as to port operators to unload cargo from stranded ships, Kim said in the statement. After Hanjin Shipping filed for receivership last week, its vessels and their goods have been left in limbo as port operators refused work pending payment, roiling customers’ supply chains before the year-end shopping season.
“The government is trying to extinguish the most immediate fire’ to help ease some supply-chain bottlenecks,” Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan, said Monday. “So those toys held up in container boxes will be able find their way to consumers.”
Hanjin Shipping advanced 320 won to close at 1,390 won in Seoul trading. The stock has plunged 62 percent this year, trimming its market value to 341 billion won, while Korea’s Kospi index has gained 5.4 percent in the period.
Hanjin Group will raise the remaining 60 billion won using its stake in a terminal at Port of Long Beach and other assets as collateral.
The group also said it will also help ease the supply-chain disruptions by providing assistance in transporting goods through units. Hanjin Transportation Co. has set up a task force to help unload cargo from vessels and the group’s Korean Air Lines Co. also will consider moving cargo by air as an alternative way to easing the supply crunch.
Vice Finance Minister Choi Sang Mok said Monday that Hanjin Shipping is seeking stay orders in 43 countries to protect its vessels from being seized and will call at certain ports such as Hamburg and Singapore where they are deemed less likely to be stranded.
The nation’s Financial Supervisory Commission has said operations of 79 of Hanjin’s vessels, including 61 container ships, have been disrupted. Offloading the containers would help Hanjin Shipping’s clients like LG Electronics Inc. get their goods back on land and transported via other ships or by road to their customers.
Hanjin Shipping also filed for Chapter 15 bankruptcy protection on Sept. 2 at the US Bankruptcy Court in Newark, New Jersey. The court will hear the company’s petition for provisional relief on Sept. 6 after approving its application to reduce the time for a hearing, according to a court filing dated Sept. 3.
