South Korea’s Hanjin Shipping Co Ltd said it would file for court receivership after losing the support of its banks, and the country’s financial regulator said a rival operator will look to buy Hanjin’s “good” assets.
Banks withdrew support for the world’s seventh-largest container carrier on Tuesday, saying a funding plan by its parent group was inadequate to tackle the firm’s 5.6 trillion won ($5 billion) in debt.
Hanjin Shipping also said one of its vessels, the Hanjin Rome, was seized in Singapore by a creditor on Tuesday, while another vessel, the Hanjin Sooho, was denied entry to a port in Shanghai.
South Korea’s Financial Services Commission said Hyundai Merchant Marine Co Ltd, the country’s second-largest shipping line, will look to acquire its rival’s healthy assets, including profit-making vessels, overseas business networks and key personnel.
A Hyundai Merchant Marine spokesman told Reuters nothing had been decided on a potential acquisition of Hanjin assets and that the firm will hold talks with Hanjin’s lead creditor, Korea Development Bank on future plans.
Hyundai Merchant Marine is also in the process of voluntary debt restructuring amid a global downturn for a shipping industry battered by sluggish trade and overcapacity.
The FSC also said Hanjin Shipping’s receivership filing would have a limited impact on domestic financial markets.