Creditors agree to inject new cash into Hanjin shipyard

By Park Sae-jin Posted : May 11, 2016, 11:24 Updated : May 11, 2016, 11:24

[Courtesy of Hanjin Heavy Industry]


Creditors agreed Wednesday to provide a new cash injection of 102 million US dollars to South Korea's oldest shipyard, Hanjin Heavy Industry, in return for the sale of real estate and non-core assets.

Hanjin Heavy said in a regulatory filing that it would receive some 120 billion won ($102 million) along with a debt-for-equity swap under a restructuring program which would expire at the end of 2018. In return, the shipyard agreed to raise two trillion won by selling assets including its energy-related segment.

The ailing shipyard, founded in 1937, is a Hanjin Group unit which has applied for a creditor-led restructuring program to avoid bankruptcy. It received 130 billion won in January from creditors.

With its thinning backlog of orders for container carriers and drill ships, Hanjin Heavy promised to focus on the construction of naval ships in the southern city of Busan, while its shipyard in Subic Bay in the north of the Philippines will continue to build merchant ships. 

Hanjin Heavy's net loss narrowed to 261 billion won last year from 299 billion won a year earlier. Monday's accord comes as creditors are asking the shipyard's parent group to step up the restructuring of Hanjin Shipping, the country's largest container carrier.

Aju News Lim Chang-won = cwlim34@ajunews.com
 
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