South Korea says cash at Hanjin, parent group support should cover offloading fees

Fri Sep 23, 2016 4:57am EDT
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By Christine Kim and Cynthia Kim

SEOUL (Reuters) - South Korea's government said cash held by Hanjin Shipping Co Ltd 117930.KS and funds pledged by its parent group should meet the costs of unloading some $14 billion in cargo stranded on vessels operated by the troubled container line.

The collapse of South Korea's biggest shipping operator late last month has plunged the shipping industry into chaos ahead of the crucial year-end holiday shopping season as dozens of vessels and their crews wait for money needed to pay for port and handling fees.

The government said a 60 billion won ($54 million) loan pledged by Korean Air Lines Co (003490.KS: Quote), Hanjin's largest shareholder, and additional support promised by executives associated with the firm should cover the costs related to the offloading of all Hanjin ships.

"We've calculated the costs that will be needed to offload the cargo, and this can be covered roughly with the funds that have been pledged," Vice Finance Minister Choi Sang-mok told reporters on Friday.

South Korea will also announce new measures to bolster the shipping industry in October, which will include advice on how other shipping companies can avoid Hanjin's problems in the future.

Ninety percent of Hanjin's 97 container ships should have completed offloading by the end of October, the government said. Hanjin has begun returning leased ships to their owners, and some vessels have been sold.

On Friday, the Singapore high court approved the discharge of cargo controlled by five container shipping companies on the Hanjin Rome, one of the several seized ships owned or leased by Hanjin.

The Hanjin Rome was arrested in a dispute over unpaid rental payments totaling more than $2.4 million owed to German shipowner Rickmers Holding, court documents show.   Continued...

A Hanjin Shipping Co ship is seen stranded outside the Port of Long Beach, California, September 8, 2016. REUTERS/Lucy Nicholson/File Photo