HHIC Seals Deal with Creditors on Business Normalization

Cash-strapped South Korean shipbuilder Hanjin Heavy Industries & Construction Co. (HHIC) has signed a Memorandum of Understanding (MoU) on business normalization plan with its creditors, led by the Korea Development Bank, on May 10.

The shipbuilder filed a request to restructure its debt with its creditors in January, having been faced with liquidity shortage.

Under the deal, valid until 2018, the company will receive KRW 120 billion (USD 103 million) of new funding from its nine creditors. HHIC has agreed to in turn sell its non-core assets, such as energy units Daeryun Power Co. and Byeollae Energy Co., cashing in expected total of KRW 2 trillion.

The creditors have previously approved an emergency financial boost of USD 109 million to Hanjin Heavy in January this year.

In addition, creditors agreed to a refund guarantee for Subic Shipyard in the Philippines if the shipbuilder fails to deliver a ship on time.

The agreement with creditors was already expected as the shipbuilder was not hit by the ordering slump in the offshore oil and gas industry as is the case with its counterparts DSME, HHI and SHI.

World Maritime News Staff

 

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