Hanjin faces rocky road to normalization

Shipping firm needs operating funds to unload cargo

By Nam Hyun-woo

There was some temporary relief Saturday to the havoc stemming from Hanjin Shipping’s filing for court receivership after a U.S. court granted the ailing company provisional protection from creditors so it can unload cargo at some U.S. ports.

But there are many hurdles remaining before the $14 billion shipping crisis can be resolved, because U.S. truck drivers are unwilling to carry Hanjin containers as they fear they will not be paid. Also domestic financing issues are deadlocked.

Multiple U.S. newswires reported Sunday that the Hanjin Greece, which has been stranded off the California coast for more than a week, entered the Port of Long Beach and began unloading after U.S. bankruptcy Judge John K. Sherwood, Friday, granted Hanjin Shipping a provisional stay order, which protects its vessels from being seized.

According to the Korean government, three other U.S.-bound Hanjin vessels off the port ― the Hanjin Boston, the Hanjin Gdynia and the Hanjin Jungil ― will also enter the port to unload. A Korean bankruptcy court approved the company’s release of $10 million to cover the ships’ unloading costs.

The Hanjin Greece’s unloading broke the company’s logjam at the port, which has continued since the Hanjin Montevideo left there Aug. 31.

As of Saturday, 20 of 97 Hanjin container vessels finished unloading at ports in Korea, China and other countries. Except for 36 vessels that the company will recall to Korea, the government said 41 vessels still remain in limbo.

An estimated 170 billion won ($153 million) is required to cover the cost of unloading the remaining vessels. With Hanjin creditors saying no additional aid will be provided, Korean Air, Hanjin Shipping’s biggest shareholder, pledged to release some 100 billion won, including 40 billion won from Hanjin Group Chairman Cho Yang-ho’s personal assets.

However, the Korean Air board placed a condition that the carrier will provide the amount only after Hanjin Shipping’s 54 percent stake in the Long Beach Total Terminals International (TTI) is given as collateral.

This raised questions about whether the 60 billion won will be provided because Hanjin’s TTI stake has already been claimed as collateral by six foreign financial firms. To become a rights holder, Korean Air needs agreement from these companies, which observers say is “unlikely.” Also, it needs approval from the Mediterranean Shipping Company, which owns the other 46 percent of TTI.

Meanwhile, in a two-day National Assembly hearing on the shipping crisis, former Hanjin Shipping Chairwoman Choi Eun-young was questioned over the company’s failure.

“I feel a moral responsibility for the crisis at Hanjin Shipping,” Choi said. But when asked if she would provide some of her own money to the company, she refused to give a concrete answer, claiming she is one of the victims of the debacle.

“I have had no time to think about a detailed plan to help the company, because I am being investigated by the prosecution,” she said.

Choi is being investigated over suspicions she illegally sold company shares using insider information to avoid losses.