[Yonhap News Photo]
Shares of South Korea's troubled second-largest container carrier, Hyundai Merchant Marine, hit the ceiling Thursday after the company reported progress in talks on returning to a global shipping alliance.
Hyundai Merchant jumped 29.96 percent, the upper daily limit, to 15,400 won (13.4 US dollars). The rally followed Hyundai Merchant's positive comment that it has started talks to join a shipping alliance.
Expectations on Hyundai Merchant's rehabilitation have been high since the company forged a crucial deal two weeks ago with foreign ship owners to slash fees on chartered ships. Hyundai Merchant could reduce a total amount of payment to foreign ship owners by 530 billion won to 1.97 trillion won.
The restructuring program includes debt-for-equity swaps and asset sales. Hyundai Merchant is also under pressure to win back a seat in the shipping alliance formed by six Asian and European container-shipping operators.
The company 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. Creditors have already endorsed a debt-for-equity swap worth 680 billion won while bondholders allowed Hyundai Merchant to reschedule a debt of 804 billion won.
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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