The lead creditor bank for South Korea’s Hanjin Shipping said it will be difficult to accept a court request to provide the firm new funds – funds seen vital to resolving the problem of cargo stranded around the world.
A Korea Development Bank spokesman said providing extra funding to Hanjin could lead to breach of trust issues as there was no certainty that additional support would help the company survive. The bank is still considering the request and has not made a final decision yet, he said.
The Seoul Central District Court presiding over Hanjin‘s receivership has asked the bank for fresh funds, warning the world’s seventh-largest container carrier needs financial support this week to normalize operations.
Hanjin and its clients are scrambling to move an estimated $14 billion worth of cargo off ships that are no longer operating normally amid in the shipping industry’s peak season ahead of the year-end holidays.
More than half of Hanjin‘s vessels have been blocked from docking at ports or denied service onlashing firms on fears they will not be paid, while some ships have been seized by creditors. As of Wednesday, some 86 vessels were not operating normally, Hanjin Shipping said.
With expectations high that Hanjin will eventually be liquidated, there is little clarity on just how the problem of stranded cargo will be resolved.
Hanjin is seeking stay orders to prevent its ships from being seized by creditors in 43 countries, while South Korea’s government plans to deploy more than 20 container ships starting next week for routes to the United States, Europe and Southeast Asia as substitutes for Hanjin ships in a bid to contain the fallout.
A U.S. court on Tuesday granted temporary protection to Hanjin, allowing its ships to dock at U.S. ports without the risk of being seized.