Hanjin bankruptcy: S Korea throws lifeline to shipping firm

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South Korea’s government has said it might provide Hanjin with loans to keep the bankrupt shipping giant afloat.

Officials said Seoul could give 100bn won ($91m; £68m) or more in long-term funding at low interest rates if Hanjin provided the necessary collateral.

The shipping company’s shares rose more than 20% on the news of a lifeline.

Hanjin’s collapse has left much of its fleet stranded at sea, unable to dock over fears that vessels be seized by creditors.

Parent company Hanjin Group on Tuesday also said it would inject $90m in fresh funds to resolve the disruptions to the cargo transport currently stuck at sea.

Hanjin Group is a huge, family-dominated conglomerate and also includes Korean Air.

Bankruptcy protection

Hanjin Shipping last week filed for receivership in South Korea after attempts to raise fresh funding for the indebted company failed.

On Monday, the company said it would seek bankruptcy protection in more than 40 countries to protect its fleet from being repossessed.

Under bankruptcy protection a company can reorganise its debts and stop assets from being seized.

Hanjin is the world’s seventh-largest container line and has been unprofitable for four of the past five years.

The global economic downturn in recent years severely affected profits across the cargo shipping industry.

Fierce competition and falling prices had lead to a $5.4bn (£4.1bn) debt for Hanjin before its creditors refused to offer a new lifeline.

 

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