[Courtesy of Hyundai Merchant Marine]
Shares in South Korea’s troubled Hyundai Merchant Marine shed more than two percent Tuesday, a day after its stock trading was halted for filing for co-management with creditors.
In a regulatory filing Monday, the country’s second-largest shipping company said it filed for "co-management with its creditors to tide over its liquidity crunch through a self-rescue plan".
The state-run Korea Development Bank and other creditors are to decide whether to approve the proposal by March 29. If approved, the company’s maturing debts will be rolled over and part of them will be rescheduled.
Hyundai Merchant, a shipping arm of the Hyundai group, is saddled with a total debt of about four billion dollars. About 360 billion won ($310 million) comes due this year, including 120 billion won due by April 7.
Creditors have urged the company to ride out its liquidity crisis through aggressive restructuring and sales of non-core assets.
Last year it posted 253.5 billion won in operating losses amid a protracted slump in the shipping industry. With the country’s biggest liner Hanjin Shipping in an equally bad shape financially, there have been reports on the possible merger of the two shipping firms.
As part of a 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 other Hyundai group units including Hyundai Logistics and Hyundai Oilbank.
Hyundai Merchant said it was in negotiations with potential buyers to sell its stake in a terminal in the southern port of Busan. It also promised to guarantee a 285.8 billion won debt in H-Line Shipping for creditors Legenda Maritime S.A. and Continent Maritime S.A. from March 25 this year to May 5, 2027.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
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