Moving to unsnarl the chaos in its container cargo after it filed for bankruptcy protection, Hanjin Shipping Co. will seek stay orders in dozens of countries, the Financial Services Commission said Monday.
Hanjin, South Korea's largest ocean container shipper, will seek bankruptcy protection in 43 countries, including Canada, Germany and Britain, and the government said it would urge those countries to expedite the process.
Hanjin filed for bankruptcy in the U.S. and South Korea last week.
A company spokeswoman, Park Eun-hye, confirmed Hanjin was moving to protect its assets but refused to specify in how many countries, beyond the U.S. and South Korea.
The intent is to minimize seizures of Hanjin Shipping's vessels in foreign countries, the South Korean government said in a statement jointly released by several ministries, including the FSC. Hanjin said last week that one ship had been seized in Singapore.
South Korea hopes to salvage its ailing container shipping sector, which like ocean shipping worldwide has been battered by weak demand and overcapacity. But it is reluctant to commit huge sums of taxpayers' money, and hopes to orchestrate a takeover by Hanjin's smaller rival, Hyundai Merchant Marine, which is already being restructured.
The moves would protect Hanjin's assets from being seized by creditors while South Korea arranges to have Hyundai Merchant Marine, take over Hanjin's key assets, including its vessels, workforce and networks.
With its assets frozen, Hanjin's ships are being refused permission to offload or take on containers at ports worldwide, out of concern tugboat pilots or stevedores may not be paid. Out of 141 vessels the company operates, 68 were not operating normally, were stranded or seized, as of Sunday.
The South Korean giant represents nearly 8 percent of the trans-Pacific trade volume for the U.S. market, and with Hanjin's container ships marooned offshore, major retailers were scrambling to work out contingency plans to get their merchandise into stores.
The world's seventh largest ocean shipper, Hanjin Shipping is part of the Seoul-based Hanjin Group, a huge, family-dominated conglomerate, or chaebol, that also includes Korean Air.
The shipping company has posted net losses every year since 2011. Last week, creditors led by the Korea Development Bank rejected a plan by Hanjin Group to spend another 500 billion won ($447.2 million) to rescue the shipping firm, way short of Hanjin Shipping's more than 6 trillion won ($5.37 billion) in debts.
Yim Jong-yong, the Financial Services Commission's chairman, pushed Hanjin to move quickly to clear the logjam of freight stranded at sea, urging major shareholders and Cho Yang-ho, chairman of Hanjin Group and Korean Air Lines, to take responsibility.
He promised Hanjin support in sorting out its problems.
"What's most desirable, of course, is for Hanjin Shipping to revive itself. But in the view of many experts, that possibility is low," the Yonhap News Agency quoted Yim as saying.
Hanjin Shipping's labor union chief, Lee Yo-han, said that while the 510 crew aboard Hanjin-operated vessels are not facing any immediate crisis, they could suffer from shortages of food and water if they are stranded too long at sea.
Hanjin's share price plummeted about 30 percent early Monday, but a flurry of buying spurred by hopes for government help for the company helped erase some of the loss by mid-afternoon. Hanjin's stock closed 13.7 percent lower on Monday.
"The government asked Hanjin Group to pay some overdue fees and payments to resolve outstanding cargo issues, saying that it can help," said Ryu Jae-hyun, an analyst at Mirae Asset Daewoo Securities. "That raised expectations."
Source: Voice of America