Hyundai Merchant Marine tumbles on receivership rumors

By Park Sae-jin Posted : January 20, 2016, 14:31 Updated : January 20, 2016, 14:31
 

[Aju News DB]


Shares in South Korea’s Hyundai Merchant Marine plunged as much as 17 % on Wednesday on speculation that the country’s second largest shipping company may have to go into court receivership considering its worsening financial condition.

“Hyundai Merchant has so far failed to come up with its own rescue plan which is satisfactory for its creditors …. and the trouble will likely deepen further as the company has to repay a huge amount of debt maturing in April and July,” a Daishin Securities analyst said.

The company refused to comment on a local media report that Hyundai Merchant could be placed under court receivership.

Hyundai Merchant is the largest shareholder of Hyundai Asan Corp, which operates a long suspended tour project for North Korea's Mount Kumgang resort.

The company posted a loss of 24 billion won ($20.5 million) in the third quarter, amid a protracted slump in shipping industry.

As part of its drive to improve its financial health, Hyundai Merchant has sold two of its three large crude tankers, divested its LNG businesses and sold stakes in sister firms Hyundai Logistics and Hyundai Oilbank.

With the country’s biggest liner Hanjin Shipping in an equally bad shape financially, there has been media speculation about the possible merger of the two major shipping firms.

But the Ministry of Oceans and Fisheries stressed that it's important for the two companies to maintain their independence for the sake of South Korea's economy.

By Alex lee
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