Shipping firm Hanjin winding up Singapore operations

Hanjin's office at PSA Building will close by the end of this month, says an employee. Hanjin has been declared bankrupt and its assets ordered to be liquidated in the container shipping industry's biggest collapse.
Hanjin's office at PSA Building will close by the end of this month, says an employee. Hanjin has been declared bankrupt and its assets ordered to be liquidated in the container shipping industry's biggest collapse.ST PHOTO: JACQUELINE WOO

About 100 staff likely to be hit; Anson House premises vacated, only part of PSA Building office still open for now

South Korea's bankrupt Hanjin Shipping is in the process of winding up its operations in Singapore, and this is likely to affect about 100 employees here.

For a number of the firm's staff, the fallout has already begun. When The Straits Times visited Hanjin's Anson House premises in Tanjong Pagar last week, the office had already been emptied of both staff and furniture. The Anson House office was one of Hanjin's two locations here. The other is PSA Building in Alexandra Road, going by an online search.

A part of Hanjin's office at PSA Building appeared shut when The Straits Times visited last week, although another section remained open. An employee, who declined to be named, told The Straits Times that the still-operating part of the office is due to close by the end of this month.

The axe finally fell on Hanjin last month, after a Seoul court declared the company bankrupt and ordered its assets to be liquidated in the biggest collapse in the container shipping industry.

Once the largest shipping line in South Korea and the seventh-biggest in the world, Hanjin had been struggling under the weight of billions of dollars of debt for years.

It reached the end of its rope amid the protracted industry downturn, regarded as one of the worst in six decades, and filed for bankruptcy protection last August.

COLLATERAL DAMAGE

The downfall of Hanjin is 100 per cent attributable to poor decisions and management from (South) Korea, and therefore it is a little sad their local Singapore employees will suffer as a direct result.

MR ANDY LANE, partner at shipping consulting company CTI Consultancy.

Mr Andy Lane, partner at shipping consulting company CTI Consultancy, told The Straits Times that most of Hanjin's staff in Singapore would have been gone by the end of last year, given that Hanjin would have needed to eliminate all costs as it had had no revenue in recent months.

All that remains will likely relate to "winding-down formalities" and administrative tasks, he said.

"The downfall of Hanjin is 100 per cent attributable to poor decisions and management from (South) Korea, and therefore it is a little sad their local Singapore employees will suffer as a direct result."

Mr Wong Koon Min, partner at shipping advisory firm Moore Stephens, said the end of Hanjin's operations here is "just one more nail in the coffin" for the company.

He cited a court document that showed Hanjin had 112 employees in Singapore back in August, although the number has very likely dwindled since.

Mr Wong doubted that the staff who had been retrenched were given sizeable benefits.

"If the company really has no money, there's not much you can do about it."

But he added that the remaining employees in the still-operating part of Hanjin's office are expected to come under the liquidator's payroll, which means it is unlikely they will be owed their salaries. In a liquidation process, the liquidators get priority in terms of payment.

Meanwhile, the Hanjin Rome, a cargo vessel previously owned by Hanjin, was sold in a sheriff's sale last Wednesday, going by a list of sold vessels on the Supreme Court website.

The ship had been sitting off the eastern coast of Singapore for months, after it was placed under court arrest here on Aug 29 last year, when German shipowner Rickmers filed a civil claim for money owed by Hanjin.

It was still anchored off Singapore as of last Friday.

Ship-valuation firm VesselsValue said the vessel is valued at its demolition value of $8.03 million. This means the vessel is worth more as scrap metal than a vessel on the second-hand market.

A version of this article appeared in the print edition of The Straits Times on March 06, 2017, with the headline 'Shipping firm Hanjin winding up S'pore ops'. Print Edition | Subscribe