Korean Air approves funds for unloading Hanjin cargo

A Hanjin Shipping vessel stranded outside the Port of Long Beach, California, last Thursday. About US$14 billion worth of cargo for companies, such as Samsung Electronics, is stuck on 92 Hanjin vessels. Korean Air Lines is the biggest shareholder of
A Hanjin Shipping vessel stranded outside the Port of Long Beach, California, last Thursday. About US$14 billion worth of cargo for companies, such as Samsung Electronics, is stuck on 92 Hanjin vessels. Korean Air Lines is the biggest shareholder of Hanjin Shipping, which has filed for court protection.PHOTO: REUTERS

92 of indebted line's ships, carrying goods for firms, stranded at ports in 26 countries

SEOUL • Korean Air Lines, the biggest shareholder of Hanjin Shipping, said it will provide 60 billion won (S$74 million) in funds as part of efforts to ease a supply-chain disruption after South Korea's largest container line filed for court protection.

The carrier will give the money only after Hanjin Shipping puts up its stake in a terminal at Port of Long Beach as collateral, Korean Air said in a text message after a board meeting yesterday. The board had failed to reach a decision in two previous meetings.

The money will be used for payments to unload cargo from some of Hanjin's vessels that have been stranded near ports in North America, Europe and Asia after the shipping company filed for court receivership on Aug 31.

Hanjin Group, which controls Korean Air, had said it would provide 100 billion won, including 40 billion won from chairman Cho Yang Ho.

South Korea's ruling Saenuri Party also asked the government to offer about 100 billion won in low-interest loans on condition the owners provide collateral.

Hanjin Shipping operates the Long Beach terminal in partnership with Mediterranean Shipping.

It remains unclear whether the badly indebted company could provide matching collateral.

The Korean container line on Friday won court protection for its US-bound ships under Chapter 15 of the Bankruptcy Code, which shields foreign companies from lawsuits by US creditors while they reorganise in another country.

The decision will allow goods on at least four Hanjin ships to come into port in the US and be unloaded without fear of having them seized by creditors.

About US$14 billion (S$19 billion) worth of cargo for companies such as Samsung Electronics is stuck on 92 Hanjin vessels, including 78 container ships, stranded at 51 ports in 26 countries.

Some companies have unloaded their cargo from the vessels and are looking at alternative ways to transport their goods, according to the authorities in the South Korean port city of Busan.

Container lines including Hyundai Merchant Marine and A. P. Moeller- Maersk A/S are offering extra services to take on some of Hanjin's containers left stuck at ports.

The bankruptcy of Hanjin Shipping, if it happens, would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades because of a slump in global trade and a slowdown in China.

BLOOMBERG, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on September 11, 2016, with the headline 'Korean Air approves funds for unloading Hanjin cargo'. Print Edition | Subscribe