File picture on Hanjin Group boss Cho Yang-ho[Courtesy of Hanjin Group]
South Korea’s largest shipping company Hanjin Shipping applied Monday for creditor-led restructuring as financial regulators vowed to investigate the sale of stocks by the family of its former chairwoman.
Hanjin Shipping, one of the world's top ten container carriers in terms of capacity, is under pressure to reduce its debt estimated at 5.6 trillion won (4.9 billion US dollars). Falling freight rates have been blamed for aggravating its credit crunch.
Creditors have urged Hanjin Shipping to sell non-core assets and bring down charter fees before receiving a credit lifeline.
The application was sent to Hanjin Shipping's key creditor Korea Development Bank, but details were not disclosed. Hanjin Shipping is a subsidiary of the Hanjin Group controlled by Cho Yang-ho, who is also the chairman of South Korea's top carrier Korean Air.
It's not clear whether Cho offered to abandon managerial control of the shipping unit.
Meanwhile, the Financial Supervisory Service vowed to see if Eusu Holdings chairwoman Choi Eun-yeong, the former head of Hanjin Shipping, and her two daughters had sold a 0.39 percent stake in the company illegally to avoid losses last month.
Cho's younger brother had run the shipping company until he died in 2006 and then his wife managed it. In 2014, Korean Air acquired a controlling 33.23 percent stake in Hanjin Shipping.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
