[Yonhap News Photo]
South Korea's largest flag carrier, Korean Air, said Monday it has issued asset-backed securities worth 782 million US dollars as its parent group struggles to secure liquidity for the restructuring of its troubled shipping unit.
Korean Air, a key unit of the family-run Hanjin Group controlled by Cho Yang-ho, said in a regulatory filing that it has issued asset-backed securities scaled at 900 billion won ($782 million).
Hanjin Shipping, the world's night container carrier in terms of capacity, has been put under creditor-led restructuring. To receive a new bailout fund from creditors, it has been under pressure to step up the sale of non-core assets, lower chartered ship fees and extend the maturity of loans held by non-banking institutions.
Korean Air has seen its financial woes aggravated by the continued injection of liquidity into the shipping unit.
Anxiety is growing among Korean Air's shareholders because Hanjin Shipping has sucked nearly one trillion won from the airliner. With its debt estimated at 5.6 trillion won, the shipping unit needs at least one trillion won in its short-term liquidity to cover arrears in payment to chartered ship owners as well as operational funds.
Like other tycoons who control their family-run conglomerates through a complex web of cross-shareholdings, the Cho family controls 29.8 percent in Hanjin KAL which has 31.46 percent in Korean Air.
Cho and his family have agreed to donate their personal wealth and chip in some 24.7 billion won for an unusual investment to recapitalize Hanjin KAL, the group's holding company.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
