The Hanjin Shipping group has cargo stranded around the world after its collapse. This cargo is valued at $14 billion. The failed shipping group is the largest container shipping company in South Korea, and needs to raise enough funds to get the cargoes unloaded. The total sum needed for this has not been revealed – if it is even known!
The company was hit hard by the global economic downturn and falling prices in the face of aggressive competition. The whole cargo shipping industry was affected, Hanjin could not survive. It failed in August with $5.4 billion debts with many container ships still at sea. A total of 89 vessels is estimated to be involved. The fleet owns 141 vessels in total, and some have already been seized by creditors.
Hanjin shipping has filed for receivership in South Korea but still needs cash to recover the cargoes. No port is willing to receive the cargoes of the ships involved until port fees have been paid. They may also accept guarantees of future payment.
Hanjin is currently not in a position to offer such guarantees. Hanjin creditors, banks and even the South Korean government have so far expressed reluctance either to offer guarantees or to put up the cash. Many of the ships still at sea or anchored offshore contain perishable goods and others destined for the Christmas markets.
Among those with goods still at sea is Samsung, with goods valued at $38. This comes at a bad time for Samsung, following the disaster of its flagship Note 7 Smartphone and its exploding batteries. The company is considering taking the goods off by plane, hiring 16 freighter planes to transfer goods to its mainly American customers.
The Hanjin shipping firm’s holding group is Hanjin Group. This has pledged 100 billion won ($90.6 million) which will not go far. Cho Yang-ho, chairman of the group, stated that he would provide 40 billion won of his own money. This would provide another ($36.2 million) and also borrow 60 billion ($54.4 million) won from banks. This totals $181.2 million against a cargo worth $14 billion and debts of $5.4 billion.
The South Korean government offered another 100 billion won via government–backed creditors. It has offered to send over 20 container ships to accept the cargoes. This offer is under consideration by Hanjin Group. This is a difficult situation all round, and the Hanjin Shipping Company has a serious situation on its hands.
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