Financial Services Commission head Yim Jong-yong.[Namgung Jinwoong = timeid@]
South Korea's financial watchdog extended the deadline Friday for Hyundai Merchant Marine to complete negotiations with the foreign owners of chartered ships ,but said the country's second largest container carrier would face court receivership if talks fail.
Initially, Hyundai Merchant was under pressure to wrap up negotiations on lowering rates on leased vessels by the end of this week. Talks began in Seoul Wednesday but there has been no agreement yet.
The Finance Services Commission (FSC) said the deadline would be extended to help the two sides accelerate negotiations "without being constrained by time". "However, we cannot drag our feet forever and delay restructuring. Negotiations should be completed at an early date," it said in a statement.
FSC chairman Yim Jong-yong said negotiations were at the final stage. "Neither we are optimistic nor pessimistic," he said, warning that a failure in talks means "court receivership".
Hyundai Merchant aims to cut leased fees by 28.4 percent on average. It has
reportedly proposed that half of the lowered charter rates could be compensated through a swap with stocks while creditors offered to swap their loans into stocks.
Hyundai Merchant has been the first serious target of creditor-led restructuring that could change the picture of the world's shipping industry suffering from falling freight rates. A prolonged slump in global trade and overcapacity have depressed transportation rates, causing shipping lines to stem losses through job cuts and consolidation.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
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