South Korean shipbuilder Hanjin Heavy Industries and Construction (HHIC) has sealed a deal with its creditors on the shipbuilder’s self-rescue plan that will see the two parties enter joint management of the company.
However, the agreement, set to enter into force in the coming month and a half, stipulates for major workforce cuts, predominantly through voluntary retirement, Yonhap reports. The measure is likely to see up to 500 jobs cut.
In addition, creditors are reported to have also asked for wage reductions, personnel relocation and some asset disposal.
As World Maritime News reported earlier, having been faced with cash shortage the Busan-based company was trying to agree on a debt restructuring plan with its creditors and had requested a voluntary agreement with its Korea Development Bank (KDB).
Hanjin has been posting losses for six years now due to a sluggish industry condition but also in part due to financial losses stemming from its investment in the Philippines-based Subic Shipyard.
The shipbuilder’s debt stood at KRW 1.6 trillion (USD 1.34 billion) in November last year, including KRW 500 billion owed to KDB and KRW 210 billion to Hana Bank.
World Maritime News Staff