[Courtesy of Hyundai Group]
South Korea's troubled Hyundai Merchant Marine was given a chance to escape from a credit crisis Thursday after creditors agreed to keep it afloat under their care at least for five years.
The country's second largest container carrier said in a regulatory filing that an agreement was signed with an association of creditors on its rehabilitation. The agreement would expire on June 30, 2021, but it's extendable. From now, it will be controlled and managed by creditors with no interference from its parent Hyundai Group.
The move came a week after Hyundai Merchant was allowed to join a global shipping alliance called the 2M of Maersk Line and Mediterranean Shipping, the world's two largest carriers. Joining a global shipping alliance has been a key condition set by creditors in return for restructuring the debt-stricken company.
Expectations on Hyundai Merchant's rehabilitation have been high since the company forged a crucial deal last month with foreign ship owners to slash fees on chartered ships.
Creditors have already endorsed a debt-for-equity swap worth 680 billion won (595 million US dollars) while bondholders allowed Hyundai Merchant to reschedule a debt of 804 billion won.
Hyundai Merchant and its domestic rival Hanjin Shipping have been the victim of a prolonged slump in global trade and overcapacity that have depressed transportation rates, causing shipping lines to stem losses through job cuts and consolidation.
Hanjin is under pressure to secure restructuring funds from its parent Hanjin Group and lower ship charter fees. Otherwise, it may not get fresh financial support from creditors.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
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