Report: Hanjin’s Bondholders to Suffer Big Losses

Bondholders of the former South Korean shipping company Hanjin Shipping, which was officially declared bankrupt on February 17, could experience losses of up to KRW 1.2 trillion (USD 1.05 billion), Yonhap News Agency cited industry sources as saying. 

Bondholders in question are the state-run Korea Development Bank (KDB), other state-run debt guarantee agencies and retail investors.

The shipping firm’s privately placed debt offerings stood at KRW 939 billion, while Hanjin’s publicly placed debt sale totals KRW 250 billion.

According to Yonhap, an industry source said that the exact amount of losses can be determined once a recovery rate is fixed but that it is likely for the bondholders to face “huge losses”.

Last week, the Seoul Central District Court officially declared bankruptcy of Hanjin which ended its 40-year business.

In early-February, the court informed that it would end Hanjin’s rehabilitation process as most of its key assets had been sold.

Hanjin filed for court protection in late August 2016 after its creditors led by the KDB said they would not provide additional financial support to Hanjin starting from September 4. The company experienced financial problems due to a prolonged depression in the shipping industry coupled with an oversupply of vessels.

Since then, Hanjin has disposed of many of its assets, including its entire Asia-US route network and operations on the routes, numerous boxhips and its overseas business.

The latest sale includes the carrier’s share in Total Terminals International (TTI) which operates terminals in Long Beach and Seattle. The 54 percent stake was sold to Terminal Investment Limited (TIL), an affiliate of the Switzerland-based Mediterranean Shipping Company (MSC).

Earlier this month, the KDB launched sale proceedings for ten of Hanjin ships, with a deadline for potential bidders being February 21.

World Maritime News Staff

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