SEOUL, Feb. 2 (Korea Bizwire) – A South Korean court said Thursday that it has decided to end a rehabilitation plan for embattled Hanjin Shipping Co., heralding the liquidation of the country’s one-time top shipping line.
The Seoul Central District Court said it will announce the liquidation for the cash-strapped shipping firm on Feb. 17.
The shipping line, established in 1977, was the country’s No. 1 shipper that has posted a stellar performance in line with the country’s economic growth.
Hanjin Shipping was put under court receivership in September 2016, as its creditors, led by the state-run Korea Development Bank, rejected its self-rescue plan, sending ripples to the global shipping sector.
Earlier, an accounting firm estimated the liquidation value of the shipping line at 1.79 trillion won (US$1.56 billion) saying that the liquidation of the troubled shipper is “more economical,” rather than continuing its rehabilitation scheme.
Hanjin Shipping, once the world’s seventh-largest ocean carrier, and local shippers have been under financial strain due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy.
In order to pay debts and service fees in arrears, Hanjin Shipping has been seeking to sell its profitable assets.
Earlier in the day, Hanjin Shipping said it has sold off a stake in its port terminal operator, Total Terminals International LLC (TTI) and equipment-leasing firm HTEC, as well as the debt owed to its shareholders, for a combined $78 million.
With the deal, Hyundai Merchant became the No. 2 stakeholder in TTI after Geneva-based shipper MSC which owns 80 percent of TTI.
Late last year, SM Group, a mid-sized local group that owns South Korea’s No. 2 bulk carrier Korea Line Corp., also agreed to acquire the troubled shipper’s U.S.-Asia route and other assets for 37 billion won.
Trading of Hanjin Shipping on the Seoul bourse was suspended as of 11:23 a.m. at 780 won, down 17.98 percent from the previous session’s close.