The largest shareholder of Hanjin Shipping Ltd agreed on Wednesday to lend 60 billion won ($53.96 million) to help unload cargo that has been stranded since the world’s seventh-largest container carrier collapsed late last month.
Korean Air Lines said it would make the previously pledged loan using Hanjin’s accounts receivable as collateral, even as media reports said the South Korean court handling Hanjin’s receivership doubted its ability to survive a restructuring.
The airline’s loan is in addition to 40 billion won provided by the Hanjin Group’s chairman, but the total is still short of the 173 billion won Hanjin estimated in a court submission this month that it needed to unload all cargo.
A rehabilitation plan for Hanjin is “realistically impossible” if top priority debt such as backlogged charter fees exceed one trillion won, the Seoul Central District Court said.
Korean Air Lines did not say when the funds for unloading would be disbursed. It had announced the loan earlier this month but had not been able to reach agreement on collateral.
Hanjin must submit a rehabilitation plan to the court in December.
Hanjin has begun returning chartered vessels to their owners and had been trying to secure funds to help unload ships.
An estimated $14 billion of cargo was initially trapped on its ships around the world, creating havoc ahead of the crucial holiday shopping season.
Some 13 Hanjin container ships were waiting in international waters outside Busan port, according to latest Hanjin data, as South Korea’s largest port struggled to accommodate vessels denied entry elsewhere and forced to sail home.
“It’s a highly abnormal situation. Time is money for a shipper, so the more ships wait, the more losses,” a Busan Port Authority spokeswoman said. “Some ships are waiting because they cannot leave for their destination.”
At the Hanjin Newport section of Busan port, 78.6 percent of container capacity was filled as of Wednesday morning, higher than the 60 percent preferred for efficient operation, the port spokeswoman said. Of about 33,000 containers at Hanjin Newport, about 40 percent held cargo.
Busan is one of a handful of major global ports where Hanjin ships can freely unload cargo without threat from creditors. South Korea’s maritime ministry said earlier this month that Busan and Incheon port authorities will guarantee payments for most services offered to Hanjin Shipping vessels.
Hanjin was granted stay orders to protect its ships from seizure in South Korea, the United States, Japan, Britain and provisionally Singapore earlier this month, and is applying for stay orders elsewhere. However, dozens of ships remain anchored off ports while Hanjin tries to secure funds to unload cargo.
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