S.Korea's biggest shipping line files for court receivership

Hanjin Shipping, South Korea's biggest shipping line, on Wednesday filed for court receivership after its creditors refused to provide additional financial support to the debt-ridden company.

The court filing came after the board of Hanjin decided unanimously to apply for receivership at a meeting earlier in the day, according to Yonhap news agency report.

The state-run Korea Development Bank (KDB), Hanjin's main creditor, said Tuesday that the shipper's restructuring plan was not enough to survive amid an industry-wide slump, caused by falling global trade since the 2008 global financial crisis.

The South Korean shipping industry has been grappling with a prolonged downturn in global trade that led to overcapacity and lower freight rates. Charter rates on leased vessels were fixed at a high level, increasing operating costs amid falling revenue.

Hanjin, the world's seventh-largest container shipping line by capacity, reported a loss of 474.1 billion won (425 million U.S. dollars) in the January-June period, turning into the red from a 103.3 billion won profit a year earlier. The company posted losses for four of the past five years.

Falling orders along with continued losses resulted in an increase in debts. Hanjin had a total debt of 6.1 trillion won (5.4 billion dollars) as of end-June.

Hanjin shares were suspended on Tuesday after plunging almost 30 percent in Seoul trading. The shipping line is affiliated with Hanjin Group, the 10th-largest South Korean conglomerate as of 2016 that operates the Korean Air Lines. Endit