SEOUL (Reuters) - Korea Development Bank (KDB), the lead creditor of Hanjin Shipping Co Ltd 117930.KS said on Thursday it will offer a 50 billion won ($45 million) credit line to help Hanjin unload stranded cargo.
An estimated $14 billion of cargo was trapped on Hanjin ships when the world’s seventh-largest container carrier collapsed late last month, creating havoc ahead of the crucial holiday shopping season.
The credit line is to be used only when all available funds from Hanjin Shipping, top shareholder Korean Air Lines, Hanjin Group’s chairman and a former Hanjin Shipping chairwoman meant to help unload cargo are used up, KDB said in a statement.
Korean Air Lines (003490.KS), Hanjin Shipping’s largest shareholder, agreed late on Wednesday to lend 60 billion won to help unload cargo.
The airline’s loan is in addition to 40 billion won provided by the Hanjin Group’s chairman, and 10 billion won provided by the former Hanjin Shipping chairwoman.
KDB’s credit line, like Korean Air’s loan, also takes Hanjin Shipping’s accounts receivables as collateral, KDB said in a statement.
However, KDB’s loan will take higher priority than Korean Air’s claim, and the funds are not meant to support Hanjin Shipping as a company but to address cargo delays, KDB said.
Even with KDB’s credit line, the total is still well short of the 270 billion won Hanjin estimates it will need to clear all the cargo, a Seoul Central District Court judge said on Thursday, citing the company’s most recent figure submitted to the court.
Some 31 of Hanjin’s 97 leased and owned container ships have completed unloading, Hanjin Shipping data showed on Thursday. All chartered vessels have been ordered to be returned to their owners but dozens remain waiting at sea while funds are raised and protection from creditors is organized.
With debt of about 6 trillion won at the end of June and the South Korean government’s unwillingness to mount a rescue, expectations are low that Hanjin Shipping will survive.
One opposition lawmaker angrily criticized the government in parliament on Thursday for not stepping in to save the company.
“It is heartbreaking that our biggest shipping company is in this situation, but we believed it would create a bigger problem if we started using taxpayers’ money to resolve this problem,” Finance Minister Yoo Il-ho said in response.
($1 = 1,099.9000 won)
Additional reporting by Christine Kim; Editing by Lincoln Feast