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Hyundai Merchant Marine and Hanjin Shipping are facing crucial negotiations this week over their restructuring efforts.
Five ship owners which have leased ships to HMM will visit Korea to wrap up discussions over the charter fees the company is paying.
HMM's creditors, led by the Korea Development Bank (KDB), suggested a May 20 deadline for the talks. If the cash-poor shipping line does not get the 28.4 percent cut demanded by the creditors, it will probably be placed under court receivership.
HMM has paid $821 million in charter fees and is negotiating with 22 ship owners around the world. Last week, the company failed to join The Alliance, a new shippers group led by Germany’s Hapag-Lloyd, but said that it expects to be able to apply for membership if it manages the leasing talks successfully.
KDB put forward a debt rescheduling plan
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Tuesday that included a 700 billion-won debt-for-equity swap on the precondition that HMM succeeded in charter fee negotiations. Other creditors will consider the plan for a week and will deliver a response by May 24.
"In the meeting, we expect to reach a verbal agreement with the ship owners," an official at HMM said. He added that creditors will also join in the negotiations. Market watchers expect the debt rescheduling plan will likely work in HMM's favor in the talks.
Hanjin Shipping will hold a meeting of its bond holders Thursday to ask them to reschedule its debt. Hanjin is a member of THE Alliance, as it passed one of three preconditions set by its creditors ― the remaining two are charter fee cuts and debt-rescheduling.
For more of The Korea Times story: www.koreatimes.co.kr
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