Bankrupt Hanjin Shipping to be delisted


Bankrupt Hanjin Shipping to be delisted

Hanjin Shipping, once South Korea’s largest shipper, is set to be delisted from the local bourse on March 7, while newly established SM Line Corp. will begin its first service on Mar. 8.

Shares of Hanjin Shipping closed at 12 won (US$0.01) on March 6, plunging 68 percent from the previous trading day. It was the last day of the seven trade days that the country’s bourse operator Korea Exchange allowed investors to sell off Hanjin stocks.

Trade of Hanjin Shipping was halted on Feb. 2., amid market anticipation of the company’s bankruptcy. On the same day, the Seoul Central District Court said it had decided to end the debt rehabilitation scheme for Hanjin, as liquidation would bring more value than rehabilitating the shipping company. After two weeks of appeals that ended on Feb. 17, the company was declared bankrupt.

Hanjin Shipping made its debut on the Kospi market on Dec. 29, 2009 under the ticker 117930. Hanjin’s share price was 21,300 won per share on the first day and its rose to a record high of 38,694 ($33.4) per share on Jan. 7, 2011, before the shipping industry and company began to suffer from financial strain.

In 2011, amid falling freight rates caused by an oversupply of ships and slow demand, the company reported a loss of 824 billion won on an operating loss of 493 billion won.

The liner was put under court receivership in September 2016, as its creditors led by the state-run Korea Development Bank rejected its self-rescue plan.

Part of Hanjin’s legacy will be carried on by SM Line as the new liner, which has absorbed some of Hanjin’s assets. It will commence its first service on Mar. 8. The first container ship will depart from a Busan port and head to Vietnam and Thailand on Wednesday, according to the company.

Next month, the liner will launch Korea-Japan and Korea-China routes as well as transpacific operations.

SM Line, part of Samra Midas Group, purchased the Asia-North America shipping route of Hanjin Shipping and absorbed some 270 of Hanjin’s former employees.

In January, it also acquired a 100 percent stake in Gwangyang Terminal and an 85.45 percent stake in Gyeongin Terminal from Hanjin.

The liner will operate a total of 12 vessels to Vietnam, Thailand, West India, Japan, China and the West Coast of the US. The company said additional routes to East India, Indonesia, and Malaysia are expected to be added.

Industry watchers said there are both hopes and challenges for the new liner.

“As SM Line is equipped with Hanjin Shipping’s networks and human resources as well as price competitiveness, it could be possible for the company to become the second-largest flagship liner following Hyundai Merchant Marine in the future,” an industry source said.

But another expert remained cautious about the future of the new liner. “We will have to wait and see,” he said. “(The) reputation of South Korean shippers has been tarnished with the collapse of Hanjin and the shipping industry is still slow to recover.”

Source: The Investor

Source from : International Shipping News