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Hanjin Shipping Co., South Korea's largest container carrier, said it will work with lenders to restructure debt after years of weak demand resulted in losses and cash erosion.
The shipping company said it would submit an application to its creditors this week and will disclose details of the revamp plan once they are firmed up, in a regulatory filing Friday. Banks will review the request before deciding, said state-owned Korea Development Bank, in an e-mailed statement.
Hanjin Shipping is the latest among the nation's liners recasting their debt after Finance Minister Yoo Il Ho said the industry needs to be overhauled after years of weak demand that has eroded companies cash. Operators worldwide have been slashing their workforce and considering consolidation to stem
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losses as slowing global trade and overcapacity squeeze transportation rates.
Hanjin has been unprofitable for the last five years. Its cash on hand fell 56 percent from a year earlier to 241 billion won ($211 million) at the end of 2015, according to data compiled by Bloomberg.
Hanjin Group, whose units include Hanjin Shipping and Korean Air Lines Co., said in 2013 that it plans to raise 3.5 trillion won by selling shares and other assets as part of its efforts to reduce debt. Under the plan, Hanjin Shipping sold its bulk-shipping and some terminal operations.
For more of the Bloomberg story: www.bloomberg.com
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