HMM’s Capital Reduction Approved as Creditors Reject Debt Rescheduling
Image Courtesy: HMM
Troubled South Korean shipping company Hyundai Merchant Marine (HMM) has been allowed to stay listed on the local stock exchange as the company’s shareholders approved a 7-to-1 capital reduction proposal at a general meeting today, the company said in a stock exchange filing.
The proposal adoption comes on the back of Korea Development Bank’s (KDB) decision to give the company a three-month maturity extension on its loans starting March 29th, Yonhap news agency informs.
KDB, which is one of the company’s leading creditors, opted for the move after HMM’s other creditors refused to support the company’s proposal to delay debt payment.
HMM is on course to report five consecutive years of operating losses when it releases its full-year 2015 financial results, with accumulated losses in its container division alone since 2008 to 9 months of 2015 worth USD 352 million, Drewry’s data shows.
The company has loans of KRW 382 billion (USD 334 million) maturing in 2016 and KRW 606bn (USD 530m) in 2017.
As a result, HMM has been busy disposing of non-core assets and has thus far raised around USD 3 billion in new capital and is looking to reduce its financial costs by renegotiating its debt and asking vessel charter parties to reduce their daily fees.
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Image Courtesy: HMM
