Hanjin announces 'financial improvement plan'
Hanjin Shipping has announced a major “financial improvement plan
” under which it will achieve a turnaround through restructuring and cost-cutting measures.
While Hanjin officials were not immediately available for additional information, a document on the Korean shipping company’s website said the plan involves repayment of debt, including refinancing of a bond issue; financial aid by shareholders and creditors; as well as a plan for improvement in operations.
According to a Reuters report
that appeared in the Manila Bulletin, Korean Air Lines is planning to raise $3.3 billion over the next two years by selling assets in refiner S-Oil Corp. to pay off debt and support Hanjin Shipping, an affiliate.
Other aspects of the financial improvement plan include:
- Liquidation by Hanjin of some non-core business such as bulk and LNG business and stakes in port terminals.
- Sale of some assets such as overseas office buildings and stock in “K” Line. In 2006, Hanjin and “K” Line had agreed to mutually buy 3 percent of each other’s stock to solidify their partnership. Both carriers are members of the CKYH alliance along with Cosco and Yang Ming.
- Disposal of old economic container vessels and improvement in profitability through cost reduction and reduction in supply of vessels.
- Phasing out of or restructuring unprofitable routes.
- Cost cutting in the container business by reducing fuel and optimal logistic planning.
- Scaling back or phasing down tanker and chemical business and returning chartered ship with high costs.
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