SEOUL • Korea Development Bank, the main lender to Hanjin Shipping, offered a conditional credit line of 50 billion won (S$61.2 million) to help ease supply-chain disruptions caused by the collapse of the nation's biggest container mover.
The state-owned bank will extend the loan only if the funds pledged by Korean Air Lines, the largest shareholder, chairman Cho Yang Ho and others are insufficient to help unload cargo from stranded vessels, it said in an e-mailed statement yesterday. Hanjin's accounts receivable will be used as collateral for the loan, it added.
Shares of Hanjin Shipping rallied 30 per cent, rebounding from a record low, as the promise of the additional funds followed a decision on Wednesday by Korean Air to provide 60 billion won in loans, Bloomberg said.
Though the government estimates the company needs at least 600 billion won to cover unpaid costs such as fuel and cargo handling, the newly pledged funds may help Hanjin to temporarily deal with the crisis.
"This is a temporary funding to get the cargo unloaded," said Mr Rahul Kapoor, a director at Drewry Financial Research Services in Singapore. "As long as the ships are not unloaded, it's adding up to the bills for Hanjin. The longer this goes on, it's going to get messier."
Hanjin's troubles have roiled the global logistics chain of companies such as Samsung Electronics and Nike. The collapse has caused "widespread disruptions in freight shipments worldwide", US trade groups said last week in a letter, urging the US Commerce Department to work with the South Korean government to end the crisis.
UNLOADING GOODS A PRIORITY
This is a temporary funding to get the cargo unloaded. As long as the ships are not unloaded, it's adding up to the bills for Hanjin. The longer this goes on, it's going to get messier.
MR RAHUL KAPOOR, a director at Drewry Financial Research Services in Singapore.
On top of Korean Air's loans, Hanjin chairman Cho provided 40 billion won, the group said earlier.
After the bankruptcy filing, Hanjin Shipping has slipped down the rankings of the world's major container lines. With a market share of 2.6 per cent as of Wednesday, it is now the 10th biggest, falling from the seventh position, according to shipping data provider Alphaliner.
Meanwhile, former chairman Choi Eun Young is being investigated for possible insider trading after she sold all her stock in the company, the Wall Street Journal reported. Ms Choi, who stepped down in 2014, and her two daughters disposed of their stock in Hanjin between April 8 and 20, which saved the family around S$1.35 million as the company continued to sink.