Market Research News

Hanjin Shipping Shares Increase Unexpectedly in Value

  • September 23, 2016
  • By Rajesh Namase
  • 0

Hanjin Shipping shares have unexpectedly jumped in response to a Korean Air Lines loan. The troubled South Korean shipping company had been saddled with debts of over $5 billion. As a result, its ships were unable to unload their cargoes at a critical time of the year.  We have covered this issue several times, following the history of Hanjin’s problem.

The South Korean government was hesitant to help the company out, although courts had helped by releasing cash from the company to help unload a number of ships. A week ago, there were still almost 100 ships at sea being unable to unload due to lack of funds.

Hanjin Shipping Shares

Korean Air Lines Helps Hanjin Shipping Out

The latest episode is that Hanjin Shipping’s largest shareholder, Korean Air Lines, has approved a 60 billion Korean won loan ($54 million) to the shipping company. This will be available once “the necessary procedure is completed.”  What this means has not been explained.

Hanjin Shipping shares jumped by 28% in South Korea – good for speculators hoping for a swift conclusion to the company’s immediate problem of finance.  Korean Air Lines shares increased by 6% in early trading.

Incoming Funds Helping Hanjin Out

The South Korean government estimated that Hanjin Shipping required a total of 600 billion won to meet all the unpaid costs owed such as shipping handling and fuel.  However, the 60 billion won loan will help the company meet initial unloading and other costs.

The Hanjin Group, parent of Hanjin Shipping, has already stated that it will give its shipping division 100 billion won in funds to help resolve the issue of the containerships still stuck at sea. Chairman Cho Yang-ho provided 40 billion won of that figure from his personal private funds.

Korean Air Lines Owns One Third Hanjin Shipping Shares

However, Hanjin Shipping must still provide a rehabilitation plan to creditors by December. Even so, creditors are not bound to agree to that plan. The entire shipping industry has been suffering since the economic problems of a few years ago.

Korean Air Lines owns 33.2% of Hanjin Shipping shares.  Less than 1% is held by a whole heap of other investors including BlackRock Fund Advisors and other fund managers.  Things are looking brighter for Hanjin Shipping, but there is still a long way to go yet.

About Rajesh Namase

Rajesh Namase is a technology enthusiast, online marketer and SEO. He specializes in online marketing (SEO, SEM, Social Media, Content Markting, Email Marketing). Apart from that, he loves to blog about technology on TechLila.