By Jhoo Dong-chan
Ailing Hanjin Shipping is seeking to secure liquidity by selling its facilities at Long Beach, California, one of the company’s core assets in its Asia-America operations route.
According to sources, Friday, the Hanjin Group is considering taking over the shipper’s terminal to provide breathing room for management over a liquidity deficit.
In April, Hanjin Shipping said in its self-restructuring plan submitted to creditors, led by the state-run Korea Development Bank, that it planned to secure 100 billion won ($90.7 million) through selling its Long Beach terminal in California.
The terminal is one of the largest on the west coast of the U.S. with an annual capacity of more than 3 million twenty-foot equivalent units (TEUs).
In a bid to keep the beleaguered shipping company afloat, Hanjin Shipping sold its 21 percent stake in the Tan Cang Cai Mep International Terminal in Vietnam for 23 billion won to Hanjin Transportation, a parcel delivery company under Hanjin Group. It also sold a bulk carrier to H-Line Shipping for 14 billion won as well as its H-Line Shipping stake for 33 billion won.
In June, it also sold its trademark rights to Hanjin Kal for 74.2 billion won and operating rights on eight Southeast Asian routes for 62.1 billion won. The company also sold its London and Tokyo offices for 32.2 billion won and 8.2 billion won, respectively.
Through the selling spree, the company has so far secured some 267.7 billion won, likely to be used in managing its imminent liquidity crisis by the Sep. 4 debt relief deadline.
The forecast for management normalization is, however, still dim.
Hanjin Group, last month, requested financing for the deficits from creditors while offering to supply the ailing shipper with 400 billion won through capital increases by issuing new stocks. But its creditors immediately refused the group's offer, conditioning "at least 700 billion won" for such a request.
“I don’t think Hanjin Group has the financial room to reach the total of 700 billion won to help the shipper,” said a creditor group official. “It is very likely that the shipper will enter receivership.”