Cash-strapped shipping company Hyundai Merchant Marine (HMM) has managed to secure some breathing space from its creditors who agreed to a three-month maturity extension on the company’s debts.
Specifically, HMM’s creditors’ council, led by the Korea Development Bank (KDB) gave a green light to the extension of the company’s debt maturity from March 29 to June 29, giving more time to the company to try to normalize its financial situation and complete efforts aimed at boosting its liquidity.
According to KDB, under the agreement, all interested parties are to share the burden of this decision, a stock exchange filing read.
The move forms part of the company’s self-rescue plan through which it filed for co-management with its creditors which allowed for HMM’s maturing debts to be rolled over and part of them rescheduled.
HMM, which has loans of KRW 382 billion (USD 334 million) maturing in 2016 and KRW 606bn (USD 530m) in 2017, is on the course to report five consecutive years of operating losses.
The company has been in talks with ship owners since February on lowering the freight rates so as to avoid bankruptcy. In addition, HMM announced its decision to sell its stake in the Busan-based Hyundai Pusan New-Port Terminal Co. in an attempt to return to liquidity.
Under the plan, HMM, which owns 50 percent plus one share in the port terminal, would sell 40 percent plus one share to the Port of Singapore Authority (PSA) for a price of some USD 85.7 million.
World Maritime News Staff