Hanjin Bulker Arrested in South Africa

File image courtesy Hanjin

By MarEx 2016-05-26 19:46:09

South Korea's Chosun Ilbo reports that the Hanjin Shipping-operated bulker Hanjin Paradip has been arrested by a South African court for alleged unpaid charter fees. 

Equasis shows Hanjin Shipping Holdings as the Paradip’s beneficial owner, and Hanjin includes her in its list of owned vessels; Hanjin was not immediately available to confirm her ownership status, but a spokesperson told Chosun Ilbo that charter fees on the ship have gone unpaid because "we have yet to receive the money raised by selling ships and equity. We should be able to resolve the problem in negotiations."

Hanjin charters over 90 vessels, including more than 30 bulk carriers, out of a total fleet of about 150.

On Monday, shipowner Seaspan Corporation issued a prospectus warning that Hanjin was behind on more than $11 million in charter payments for three 10,000 TEU container ships. The firm added that Hanjin has asked it for a rate reduction in exchange for equity. It has rejected the request and emphasized that Hanjin and its creditors could not change the rates without Seaspan's consent; a breach of charter parties could allow Seaspan to retake possession of the vessels and recharter them. 

Hanjin's bondholders reached an agreement last week to extend the maturity of $30 million in debt for four months, conditional on a reduction in charter rates and participation in a global container alliance (THE Alliance). Competing South Korean line Hyundai Merchant Marine faces identical challenges in securing rate reductions and creditor leniency, and some suggest that the two carriers may survive better as a merged entity – an option that Korean regulators have so far kept off the table. Richard Clayton, Chief Maritime Analyst for IHS Maritime and Trade, recently called this the industry's "most unlikely merger, although the most necessary."

"The South Koreans are in trouble," said Port of Long Beach CEO Jon Slangerup, speaking to Bloomberg. "They are competitors but it would not surprise me if they were forced to join together as one."