Bondholders endorse $676 mln debt recast for Hyundai Merchant

By Park Sae-jin Posted : June 1, 2016, 16:48 Updated : June 1, 2016, 16:48

[Photo by Namgung Jinwoong = timeid@]


South Korea's Hyundai Merchant Marine got off to a good start Wednesday in its bid to survive a liquidity crisis after bondholders approved a proposed debt recast program worth 676 million US dollars.

The accord, reached in two-day negotiations with bondholders, came as South Korea's second largest container carrier was involved in final talks with foreign ship owners on slashing high fees on chartered ships.

Bondholders allowed Hyundai Merchant to swap half of their debt for stocks and pay back the remainder after a two-year grace period. The total amount of debt to be rescheduled would reach about 804 billion won ($676 million).

Last week creditors endorsed a debt-for-equity swap worth 680 billion won (572 million US dollars) for Hyundai Merchant saddled with a total debt of more than five trillion won at the end of March.

Key creditor Korea Development Bank, however, warned the debt-for-equity swap would be null and void if Hyundai Merchant failed to reach an agreement in negotiations on lowering rates on leased vessels. Financial regulators have said that a failure in talks means court receivership.

The company has been the first serious target of creditor-led restructuring that could change the picture of the world's shipping industry hit by 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.

Hyundai Merchant has been left out of a new global shipping alliance formed by six Asian and European container-shipping operators to challenge the dominance of global giants such as Maersk Line and Mediterranean Shipping. Hanjin Shipping was included in the alliance, though it was also put under a creditor-led restructuring plan.

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

 
기사 이미지 확대 보기
닫기