South Korea's Hanjin Group said Tuesday it would provide its shipping firm with 100 billion won ($90.4 million) to help ease huge disruptions to global sea freight after the unit filed for bankruptcy. Hanjin Shipping, the world's seventh largest shipping company, is seeking bankruptcy protection at home and in the US after creditors rejected its latest plan to deal with a $5.37 billion debt.
Its bankruptcy would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades because of slumping global trade and a slowdown in China. More than half of Hanjin's fleet - 79 vessels - is either stuck in port or unable to dock, with authorities fretting the company will not be able to pay its bills.
Hanjin Group said it would spend 100 billion won, which includes a personal donation of 40 billion won from its chairman and biggest shareholder Cho Yang-Ho, to "normalise" the operations of its container ships. "We have reached the decision to minimise damage to export companies," it said in a statement. Hanjin shares jumped 30 percent to close at 1,390 won on hopes the emergency fund injection might signal a possible rescue of the firm. "However, it's too unrealistic (for the creditors) to rescue it in light of the company's huge debts," said Kang Seong-Jin of KB Investment Secuities.
Hanjin said it would also use its other subsidiaries including flag carrier Korean Air to move cargo as concerns grow over the delayed delivery of goods ahead of Thanksgiving and Christmas holiday shopping in the US. The group has been under growing pressure to offer aid to the shipper, with South Korean Finance Minister Yoo Il-Ho on Tuesday urging Cho to "take responsibility" as the controlling shareholder.
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