Creditors of cash-strapped Hyundai Merchant Marine Co. agreed to provide a new debt relief only if the shipping company cuts down its hefty chartering cost for running its fleet by up to 30 percent.
During its meeting with creditors led by the state-run Korea Development Bank on Tuesday, the company pledged that its parent Hyundai Group will address the issue to seek creditors’ bailout to ease its liquidity woes.
One official of the creditors’ group said negotiations for a debt workout voluntarily requested by the shipping company would only start depending on the outcome of its self-rescue plan including charter fees.
Hyundai Merchant Marine entered charter agreements with ship-owners during the global shipping boom. It pays nearly 2 trillion won ($1.6 billion) to hire vessels a year. Creditors are demanding it lowers the cost by 20 percent to 30 percent as any bailout will help little to ease its liquidity problems amid slow business.
The company promised to renegotiate charter rates with ship-owners to ease annual expense. Separately, it vowed to raise 70 billion won through loans backed by its stake in Hyundai Securities and sale of its stake in Hyundai Asan. Hyundai Group Chairman Hyun Jeong-eun would donate her own wealth worth 30 billion won to come up with immediate liquidity of 100 billion won. At the same time, it will try to sell its bulk vessel business and stakes in Busan New Port Terminal and Hyundai Securities.
Creditors are mulling a debt-to-equity swap and rollover upon progress in the company’s self-rescue plan.
Source: Pulse News
Source: Pulse News