Hyundai Merchant Marine concludes charter rate negotiations with owners
HYUNDAI Merchant Marine announced that its charter reduction negotiations with ship owners were successful, which paves the way for the shipping line to become a member of the recently established The Alliance.
According to MANA,With this, HMM will have completed all the restructuring measures that it had announced in February this year, including asset sales and bondholders' talks. On Monday, the group reached an agreement with Zodiac Maritime, the UK-based shipowner that has 10 container vessels on charter to the South Korean line.
Five containership owners consented to lowering charter rates by 20% and bulk vessel owners were willing to take a 25% rate cut. HMM is looking to finish inking contracts with these shipowners to have the agreements officially on paper this month.
Under the de facto agreements, HMM will pay Won530bn ($454.3m), of the Won2.5trn it is required to pay as charter fees over the coming three and a half years, by issuing new shares and long-term bonds once the contracts are signed.
The move is expected to cut its cash outlay by the said amount over that particular period of time and aid in HMM's efforts to improve its liquidity and business conditions.