[Courtesy of Hyundai Merchant]
Creditors agreed Tuesday on co-management of South Korea’s troubled Hyundai Merchant Marine in a bid to keep alive the country’s second-largest shipping company in return for a sweeping self-rescue plan.
Hyundai Merchant has proposed co-management with creditors to tide over its liquidity crunch through a self-rescue plan.
The state-run Korea Development Bank said co-management would involve institutional and private creditors as well as foreign ship owners.
KDB said Hyundai Merchant's maturing debt and interest would be rolled over by three months and part of them will be rescheduled, although some have opposed it.
The company is also required to cut lease rates paid to the owners of chartered ships.
Hyundai Merchant, a shipping arm of the Hyundai group, is saddled with a total debt of about four billion dollars. About 360 billion won (307 million US dollars) 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 is in negotiations with potential buyers to sell its stake in a terminal in the southern port of Busan.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
