Hanjin Shipping will officially announce its bankruptcy on February 17.

2017-02-04 09:00

According to Reuters, the Seoul Central District Court stated on Thursday, February 2, that it has decided to terminate the receivership proceedings of Hanjin Shipping, and is expected to declare the company bankrupt on February 17 after a two-week appeals period.

In a statement, the Seoul Central District Court said it had determined that the company's liquidation value exceeded its going-concern value. Judge Choi Ung-young stated, "The sale of Hanjin Shipping's major assets is largely complete, and it is time to decide Hanjin Shipping's fate." The court assessed that the company's going-concern value was lower than its liquidation value, and decided to terminate Hanjin Shipping's receivership proceedings, reserving a two-week period for creditors and other parties to appeal.

Hanjin Shipping, South Korea's largest shipping company and the world's seventh-largest container shipping company, filed for bankruptcy protection with the Seoul Central District Court on the afternoon of August 31 last year after failing to secure further support from creditor banks. This is the largest bankruptcy case in the history of the global shipping industry. The news sent shockwaves through the global shipping market, and the impact spread rapidly. Now, nearly half a year has passed, and the Seoul Central District Court's disposal of Hanjin Shipping's major assets is nearing completion.

According to the Korea JoongAng Daily, currently, 90% of Hanjin Shipping's assets have been or are being auctioned off, with only a few shares of terminal management companies in Japan, Taiwan, and Belgium remaining to be dealt with. According to the repayment procedures stipulated in South Korean bankruptcy law, after the payment of public debt, bank creditors will receive almost no compensation, and individual investors' investments will be completely lost. According to statistics, the total amount of loans from bank creditors, including 700 billion won from industrial banks, totals 1 trillion won. Considering that industrial banks have already fully withdrawn bad debt reserves, the impact of Hanjin Shipping's bankruptcy on the South Korean financial sector can be considered negligible. As of the end of October last year, Hanjin Shipping had more than 1,300 domestic employees; except for a small number who were absorbed by acquired companies, the rest are estimated to lose their jobs.

Mediterranean Shipping Company said on Wednesday that its subsidiary has purchased equity in Hanjin Shipping's US port operator, the latest in a series of Hanjin Shipping asset sales.

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