SEOUL, March 21 (Korea Bizwire) – An embattled shipper, Hyundai Merchant Marine Co., said Monday that it has applied for self-rescue measures which need approval from its creditors, in a bid to put its business back on a normal path.
In a regulatory filing, South Korea’s No. 2 shipper said “it filed for co-management with its creditors” to improve its financial footing and thus its business.
The latest measure came as creditors are seeking to help the cash-strapped shipper tide over its worsening liquidity situation through a self-rescue plan.
The creditors, led by state-run Korea Development Bank, will discuss the shipper’s self-rescue plan this week, and decide whether to approve the proposal by the end of the month.
If Hyundai Merchant’s self-rescue plan is approved, the shipper’s maturing debts will be rolled over and part of them will be rescheduled.
Earlier this month, Hyundai Merchant, an embattled shipping unit of Hyundai Group, decided to push for a capital reduction aimed at improving its financial health.
Hyundai Group has been working to salvage Hyundai Merchant, one of its key units, which has been in the red for years due to a decline in freight rates and global trade.
Recently, the group announced a set of self-rescue measures to improve the financial health of the company, including an asset sale.
Last year, Hyundai Merchant posted 253.5 billion won in operating losses, with its capital significantly eroded.’
In a related development, meanwhile, the Hyundai Group has come further under fire, as the Fair Trade Commission reportedly issued a report alleging that two of the group’s affiliates — Hyundai Securities and Hyundai Logistics — are suspected of having helped a relative of Hyundai Group Chairwoman Hyun Jeong-eun gain illegal profits through intra-affiliate transactions in violation of a fair trade bill banning such practices among members of conglomerates-controlling families.
The bill took effect in February 2015 and Hyundai Group could become the first to be regulated by it.
Under the bill, affiliates of conglomerates with assets exceeding 5 trillion won are barred from funneling work to companies where a family member of the business group’s owner holds more than a 30 percent stake.