Hanjin Shipping Probability Of Bankruptcy
Seaspan Corp., a container ship-leasing company, said it won’t accept Hanjin Shipping Co.’s request for a cut in charter rates by about 30 percent, dealing a blow to efforts by South Korea’s biggest liner to revamp debt amid a prolonged trade slump.
The Hong Kong-based ship lessor could instead consider ordering new, fuel-efficient vessels from a South Korean shipyard and leasing them to Hanjin Shipping, helping improve the liner’s competitiveness, said Gerry Wang, Seaspan’s chief executive officer. Hanjin Shipping operates seven container vessels leased from Seaspan, MANA correspondent reported.
“We do not accept any rate cut,” Wang said in a phone interview Thursday. “We have never done it. We won’t tolerate a contract re-negotiation. Any call for rate cut is illegal by international laws.”
Hanjin Shipping is in talks with shipowners to reduce charter fees as part of a requirement by creditors in exchange for funds to improve its financials. The South Korean government is reviewing various measures, including possible mergers, to revive an industry struggling with mounting debt after years of losses from weak demand.
Hanjin Shipping has been unprofitable in four of the past five years. The company’s cash on hand fell 56 percent from a year earlier to 241 billion won ($206 million) at the end of last year.