Hyundai Merchant Marine Co., a financially troubled shipping company based in South Korea, has announced that it has reached an agreement with owners of its chartered ships to cut leasing rates by 21 percent over the coming three and a half years.

The reduction rate fell short of the company’s goal of 28.4 percent, but HMM creditors have accepted the agreement, helping the carrier avert receivership proceedings in court.

Hyundai and the ship owners agreed in principle to slash the charter rates for a 42-month period, which the carrier claims will save it $450 million. The details of the deal are to be announced later this month.

Creditors had been pressing for charter rate cuts as one of the key conditions for a creditor-approved restructuring of HMM.

Hyundai Merchant has been in talks with shipowners since February to cut rates, as creditors claim that high freight rates would worsen the shipper’s financial health.

Korea Development Bank and other creditors have threatened that they will seek receivership for Hyundai Merchant if the carrier fails to meet three conditions: a charter rate cut, debt rescheduling approved by bondholders, and inclusion into a global shipping alliance.

Bondholders have approved a $690 million debt rescheduling, under which more than half the debt will be exchanged for HMM shares and the remaining debt will be paid back in two years.

The creditors also agreed to swap $580 million in debt for stock, all in an effort to keep the carrier in business. Hyundai Merchant had debts of about $445 billion as of the end of March.

As far as membership in a global alliance, members of the new THE Alliance have expressed interest in including HMM once it gets its financial house in order.