Even with bank help, it's unclear if the funds will be enough to solve the dilemma
SEOUL, Korea—Hanjin Shipping is to receive as much as $100 million in additional funds to resolve the cargo crisis caused by its slide toward bankruptcy.
Hanjin’s lead creditor, Korea Development Bank, said September 22 it will offer a credit line of 50 billion won ($45 million) to help the shipper unload cargo stranded offshore.
The announcement comes a day after Korean Air Lines’ board approved a 60 billion won ($54 million) loan to the troubled ocean shipping line. Korean Air and Hanjin Shipping are part of Hanjin Group, one of the largest business conglomerates in South Korea. Chairman Cho Yang-ho and former Hanjin Shipping chair Choi Eun-young earlier contributed a combined $44.6 million from their personal wealth to pay for unloading cargo on Hanjin’s container ships.
The state-owned bank said its credit line will be used only when other available funds from Hanjin Shipping, Korean Air, the company officials and others are used up.
Even with the help of the bank, it was not clear if the new funds would be enough to solve the cargo crisis.
South Korea’s Yonhap News cited a South Korean court as saying that Hanjin Shipping needs 173 billion won ($157 million) to unload cargo at ports. Including fees for transporting cargo to final destinations, the company needs 270 billion won ($245 million), Yonhap said.
Dozens of ships around the world have remained stranded for nearly a month since Hanjin’s August 31 bankruptcy filing because it couldn’t cover fuel bills or guarantee payment to dockworkers and others.
That left billions of dollars’ worth of clothing, electronics, furniture and other goods expected to fill the shelves ahead of the fall shopping season stranded offshore. Several ships were unloaded after a U.S. court provided Hanjin protection from any more seizures in U.S. territory but many are still marooned at sea.
The crisis also left sailors trapped for weeks on those ships. South Korea’s maritime ministry said sailors on the Hanjin Scarlet used rainwater for cleaning to save drinking water in case they are stranded on the vessel for a longer term. The ship only has enough food and water for its sailors until October 6.
Hanjin Shipping began providing food and other daily necessities to sailors who have less than 10 days of food left.