9/20/16, 9:22 AMKorean Court Orders Hanjin to Cut Its Fleet - WSJPage 1 of 4http://www.wsj.com/articles/hanjin-unloads-more-cargo-easing-supply-chain-fears-1474259710A South Korean bankruptcy court on Monday ordered HanjinShipping Co. to return the ships it charters back to their owners and tosell as many of its own ships as possible, in the strongest signal yetthat the debt-ridden Korean carrier will be either liquidated or turnedinto a much smaller company.“They are in a desperate search for cash to unload cargo, which is theirimmediate problem,” said Basil Karatzas, of New York-based KaratzasMarine Advisors & Co. “They are returning the chartered vessels tostop the cash bleeding in the short-term and outstanding claims bythe owners will be settled when the company is liquidated which is themost likely scenario.”The Wall Street Journal reported Friday that Hanjin, which has filedfor bankruptcy protection in courts in the U.S. and Seoul, is workingon a restructuring plan, that if approved by court, will see it keep amaximum 15 of its 37-owned ships and return to owners almost all ofThis copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visithttp://www.djreprints.com.http://www.wsj.com/articles/hanjin-unloads-more-cargo-easing-supply-chain-fears-1474259710BUSINESS ASIA ASIAN BUSINESS NEWSKorean Court Orders Hanjin to Cut ItsFleetCourt order comes as Hanjin unloads some goods at ports in California, Spain and otherparts of the world| |A container was unloaded from a cargo ship berthed at the Port of Long Beach in California lastweek. A Hanjin spokeswoman said that nearly one-third of Hanjin’s ships that had been waiting todock around the world have unloaded their cargo. PHOTO: TIM RUE/BLOOMBERG NEWSUpdated Sept. 19, 2016 9:50 p.m. ETBy IN-SOO NAM and COSTAS PARIS9/20/16, 9:22 AMKorean Court Orders Hanjin to Cut Its Fleet - WSJPage 2 of 4http://www.wsj.com/articles/hanjin-unloads-more-cargo-easing-supply-chain-fears-1474259710its 60 chartered vessels. Hanjin is the world’s seventh-biggestcontainer operator by capacity.Hanjin is losing at least $2 million a day by keeping the chartered fleet,freight brokers estimate. Hanjin spokeswoman Min Park said onMonday that Hanjin had returned four ships to their owners and willturn over the rest once they unload their cargo.The South Korean government has strongly indicated it has no plansto bail out the company.The Korean court will decide in December whether to accept therestructuring plan or let the company go under, according to courtofficials in Seoul.Ms. Park said that nearly one-third of Hanjin’s ships that had beenwaiting to dock around the world have unloaded their cargo, raisinghopes that anxious retailers will get their goods in time for the year-end holiday season.Hanjin, which is South Korea’s largest shipping company, said 28vessels have finished unloading at ports in California, Spain and otherparts of the world. Another 34 remained stranded at sea for fear that ifthey dock they will be seized by creditors. Another 35 were on theirway back to Korea.Brokers said only about $2 billion of the estimated $14 billion in cargostranded at sea when Hanjin filed for bankruptcy protection lastmonth has been unloaded.Although some ships are able to dock, Hanjin doesn’t have the moneyto pay to unload the cargo and move it to its final destination, onebroker said. “It will be easier for ships docking in Korea to unloadcargo, but there is a lot of uncertainty with ships drifting off ports inother countries.”Ms. Park said the company was negotiating with port authorities inNew York, Singapore and Manzanillo, Mexico, to start unloadingadditional cargo sometime this week.“Both the company and the [South Korean] government are in talkswith foreign authorities to solve much of the cargo crisis over the nextfew weeks and we’re making progress,” she said.Hanjin said it has managed to accomplish some of the unloadingthrough court actions and, in some cases, by agreeing to paydockworker wages up front.The Korean government said it has asked courts to protect Hanjinships from being seized in Spain, Germany, the Netherlands and Italy.9/20/16, 9:22 AMKorean Court Orders Hanjin to Cut Its Fleet - WSJPage 3 of 4http://www.wsj.com/articles/hanjin-unloads-more-cargo-easing-supply-chain-fears-1474259710It plans todo the samein comingdays incountriesincludingAustralia,India andthe UnitedArab Emirates. Such legal protections are already in place in SouthKorea, the U.S., Japan, and the U.K.Meanwhile, Korean Air Lines Co., the flagship unit ofconglomerate Hanjin Group and the largest shareholder of thetroubled shipping affiliate, hasn’t decided how it will disburse the 60billion won ($53.3 million) it promised to lend Hanjin Shipping to helpease the cargo chaos.The planned cash injection is part of Hanjin Group’s pledge earlierthis month to put up a total of 100 billion won, including 40 billionwon from the group chairman’s personal wealth, to help the shippingline.Chairman Cho Yang-ho gave 40 billion won to Hanjin Shipping lastweek.Korean Air has said it would secure the remaining 60 billion won,using the group’s stakes in terminals such as the one in Long Beach,Calif., as collateral.Korean Air said it would hold a board meeting soon to complete thematter.Hanjin moves roughly 3% of containers globally and up to 10% ofthose shipped between Asia and Europe. Some 25,000 containerscross the Pacific Ocean daily on Hanjin ships.“If the restructuring plan is accepted by court, Hanjin will emerge as aghost of its former self,” said Lars Jensen, chief executive ofCopenhagen-based SeaIntelligence Consulting. “It will be a smalloperator on a limited number inter-Asia trades.”Write to In-Soo Nam at [email protected] and Costas Paris [email protected] Korea’s Hanjin Shipping Files for U.S. Bankruptcy ProtectionStuck on Ship, One Gloomy Hanjin Crew Waits to Learn Its FateHanjin Shipping’s Rehabilitation Plan Postponed by South Korean CourtImports Decline at Southern California Ports Hanjin Shipping to Pay Handlers to Unload U.S.-Bound Ships9/20/16, 9:22 AMKorean Court Orders Hanjin to Cut Its Fleet - WSJPage 4 of 4http://www.wsj.com/articles/hanjin-unloads-more-cargo-easing-supply-chain-fears-1474259710Copyright 2014 Dow Jones & Company, Inc. All Rights ReservedThis copy is for your personal, non-commercial use
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