Hanjin Shipping Co., South Korea’s largest container operator by capacity, has applied for a creditor-led debt restructuring to avoid bankruptcy, reviving talk of a possible merger with rival Hyundai Merchant Marine Co., according to The Wall Street Journal.
Hanjin, a unit of Hanjin Group, which also controls Korean Air Lines Co., on Monday submitted a formal request to state-run Korea Development Bank, its main creditor, to restructure its debt and provide an aid package in return for self-rescue efforts such as asset sales. Hanjin’s shares on Monday plunged by the daily limit of 30 percent to a record low of 1,825 won ($1.59) as investors fretted about the future of the company.
A KDB spokesman said Hanjin Group Chairman Cho Yang-ho also had offered to hand management control of the company to creditors.
KDB said it would review the proposal with other creditors and decide by next week whether to offer assistance to Hanjin, which might include a debt rollover. If creditors reject the proposal, the company would be put under court receivership.
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