Hanjin files for receivership

News 31 Aug 2016 by WCN Editorial

After its banks withdrew support Hanjin Shipping has been forced to file for receivership.

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Hanjin Shipping appears to have reached the end of the line, after creditors led by the Korea Development Bank (KDB) announced they would no longer extend the beleaguered carrier support this week. Hanjin Shipping subsequently filed for court receivership.

There will major disruptions for some cargo owners with goods in transit on Hanjin vessels. On Tuesday the 5,500 TEU Hanjin Rome was seized in Singapore, following an application by the vessel’s owner, Rickmers Line, and is currently being held by the Sheriff of Singapore at the port’s eastern special purposes anchorage. Another vessel, Hanjin Mexico, is anchored off the coast of Busan after its owner PIL refused to sail over non payment of charter fees.

Korean media are carrying reports that Hanjin vessels are being refused service, or asked to pay cash upfront at some ports in China, and in Savannah.

There is also speculation that Hyundai Merchant Marine, itself in voluntary debt restructuring, will acquire the “healthy” assets of Hanjin, and talks between Hyundai and the KDB are said to have begun.

Included in the assets that could be sold off is Hanjin’s terminal operating subsidiary, Total Terminals Inc, which holds the lease on the Pier T terminal in Long Beach. Until LBCT is fully developed this remains the largest in the Port of Long Beach, and is a very attractive asset. In March 2014 TTI purchased the terminals 14 cranes under an agreement whereby two or three annual payments of US$5M are still remaining, WorldCargo News calculates. Six of the cranes have been or are under contract to be raised to handle larger ships.

Any breakup and sale of Hanjin Shipping could also affect other terminal operators, including DP World at its T3 facility in Dubai, that use the TOS developed by Cyberlogitec, a subsidiary of Hanjin Shipping Holdings.

Shares in Hanjin Shipping plummeted 24% before trading was suspended at the close of business in Korea on Tuesday.