It’s Official: Hanjin is Finished
It’s been kind of obvious since Hanjin assets have already been in the process of being sold off in recent weeks, but a South Korean court finally made it official yesterday: it will formally end Hanjin Shipping’s court receivership process in two weeks.
The implications of the ruling are that the Seoul court found that the South Korean shipping company, once the seventh largest in the world, is not a candidate for rehabilitation and that liquidation is the course that maks the most sense. The court was in reality stating the obvious as Hanjin assets were already undergoing liquidation.
But the formal announcement of bankruptcy will be made by the Seoul Central District Court on February 17, 2017, at which point the Hanjin legacy will be over.
An accounting firm engaged by the court estimated the liquidation value of the shipping line at $1.56 billion adding that the liquidation of the debt-saddled shipping line is “more economical” than attempting rehabilitation.
Hanjin, formed in 1977, was South Korea’s largest shipping company before it collapsed in August 2016 under a debt load of over $5 billion.
In recent weeks, Hanjin assets have been sold piecemeal, with Hyundai Merchant Marine snapping up Hanjin’s terminal in Algeciras, Spain, and a subsidiary of Mediterranean Shipping Company acquiring Hanjin’s stake in terminal operator TTI, which operates terminals at the ports of Long Beach and Seattle. The latter transaction required intervention of the a US bankruptcy court in New Jersey, which consulted with its counterpart in Seoul before approving the deal.
Drewry, the global maritime consultancy, estimates that 31 of 98 ex-Hanjin ships have found sold, fetching a total of $460 million. The rest of the fleet, with an estimated capacity of 460,000 TEU, remain idle. Hanjin’s demise in August had an immediate impact on the growing idle containership fleet, which surged, according to Drewry, from 904,000 TEU in mid-August to 1.7 million TEU in mid-November.