The heavily indebted container line will not require additional cash injections as a result of its plans to raise liquidity.
“This approval by the creditor banks will play a crucial role in our discussions regarding alliance reorganization and our business normalization efforts such as charter rate reduction and etc,” Hanjin said.
Hanjin on April 22 gave control of its operations to the Korea Development Bank, its largest creditor. Sources have said the handover took place after KDB Chairman Lee Dong-geol visited Cho Yang-ho, the shipping line’s chairman and chief executive officer, and demanded Cho surrender management control or let Hanjin enter receivership.
To raise liquidity Hanjin will sell off a number of assets including its container terminals, office in Busan and bulk carriers, which should net 411 billion South Korean won ($400 million). The company has already sold off its remaining stake in H-Line Shipping, to which Hanjin offloaded its liquefied natural gas and dedicated dry bulk divisions in 2014.
Hanjin believes that it can raise 175 billion won from terminal sales and 102.2 billion won from selling office space located in Atlanta, Busan and London, while the remainder of the 411 billion it believes it can raise will come the sale of its H-Line shipping stake, bulk carriers and brand and logo licensing.
The company’s creditors have also asked that it reduce charter costs. In addition to these efforts, Hanjin has asked its president and CEO, executive vice presidents and vice presidents to return a portion of their 2015 salary.
“As our financial improvement plan will speed up once the voluntary restructuring agreement begins, we will put our utmost effort and work closely with the creditors to achieve business normalization within nearest future," Hanjin said.
