Hyundai Merchant Marine (HMM) has pulled off a deal with owners of its chartered ships to cut charter rates by around 20% for the next three-and-a-half years, allowing HMM to avert a court-led restructuring process.

The South Korean shipowner’s creditors have accepted the charter rate reduction offer by the owners, and a creditor-led restructuring will now proceed, according to a report by The Korea Herald.

Talks between HMM and the owners had been to cut charter rates by 28% on average, but the final agreement fell short.

The cuts in charter rates would potentially allow HMM to save approximately KRW530bn ($454m) in total over the 42-month period.

As part of restructuring efforts, HMM bondholders have agreed to swap around half of its debts for equity interests in the company, and the remaining half of the debts will be paid back after five years.

HMM has now avoided court receivership and is remains hopeful of joining as the six-member new containership partnership, THE Alliance.