Financially troubled South Korean shipping company Hyundai Merchant Marine (HMM) has failed to seal a deal with ship owners on charter rate cuts, Yonhap reports, citing company officials.
The talks were launched in February and the company was optimistic on reaching the deal as it had reportedly managed to agree on cuts with 60 percent of owners. Under the plan, ship owners were requested to lower their charter rates by 28 percent on average by the middle of May, according to Yonhap.
This exerts further pressure on the struggling company which counted on the rate reductions as one of the key preconditions for the company to move forward with its restructuring process and thus avoid going bankrupt.
However, the talks between the two parties are not completely over and their might be still some room for an agreement.
Last month, HMM and state-owned Korea Development Bank (KDB) concluded a debt-for-equity swap arrangement, which will see KDB take 30 % of shares in total and the rest of the creditors will take 50% in shares in the company.
The move is expected to keep the company afloat until it completes its business normalization plan.
The company closed the first quarter of the year with an operating loss of KRW 162.9 billion (USD 139 million) and a net loss dived of KRW 276.1 billion.
World Maritime News Staff