SEOUL • Shares in troubled South Korean shipping giant Hanjin plunged 12 per cent yesterday after the company announced plans to shutter its European business, fuelling fears that it could be heading towards liquidation.
The firm has applied for court approval to close all of its units in more than 10 countries, including Germany where it has its regional headquarters, a spokesman told Agence France-Presse.
Hanjin - South Korea's largest shipping firm and once the world's seventh biggest - is seeking bankruptcy protection at home and in the United States after creditors rejected a plan to deal with a US$5.37 billion (S$7.5 billion) debt load. Its bankruptcy would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades, due to slumping global trade and a slowdown in China.
The company expects to start the closure process this week after obtaining approval from the Seoul Central District Court, the spokesman said.
The news sent its share price tumbling nearly 14 per cent at one point before closing down 12 per cent at a four-week low of 1,005 won in Seoul. Almost 80 per cent of Hanjin's market value - or the equivalent of about 950 billion won (S$1.2 billion) - has been wiped out in the past year as the firm's financial woes deepen.