Hyundai and ship owners reach agreement on chartered fees

By Park Sae-jin Posted : June 10, 2016, 16:52 Updated : June 10, 2016, 16:52

[Photo by Namgung-jinwoong = timeid@]



Hyundai Merchant Marine, South Korea's second largest container carrier, forged a deal Friday with foreign ship owners to slash fees on chartered ships, paving the way for its rehabilitation led by creditors.

The deal will help Hyundai Merchant reduce a total amount of payment to the foreign owners of chartered vessels by 530 billion won (456 million US dollars) to 1.97 trillion won. Half of the discount will be swapped for stocks and the remainder will be paid after 2022 over a five-year period.

The company has yet to jump over a final hurdle before being placed under a sweeping restructuring program that includes debt-for-equity swaps and asset sales. It has been under pressure to win back a seat in a new global shipping alliance formed by six Asian and European container-shipping operators.

The carrier saddled with a total debt of more than five trillion won at the end of March hopes to complete debt-for-equity swaps with creditors and bondholders by August so that it would be controlled by creditors with no intervention from its parent Hyundai Group.

 Creditors endorsed a debt-for-equity swap worth 680 billion won while bondholders allowed Hyundai Merchant to reschedule a debt of 804 billion won.

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.

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