SEOUL: Shares in South Korea’s foundering shipping giant Hanjin were volatile on Monday after filing for bankruptcy protection in Seoul and reportedly the US, rocking the troubled maritime freight industry.
Last week, Hanjin, the world’s seventh and South Korea’s largest shipping firm, filed for bankruptcy in Seoul, seeking court protection after creditors rejected its latest plan for dealing with a hulking $5.37 billion debt.
Hanjin’s bankruptcy would be by far the largest in the history of container-shipping, which is suffering from its worst downturn in six decades.
Holed beneath the waterline by slumping global trade and slowing growth in China, nearly half of its fleet—67 vessels—is either stuck in port or unable to dock, with authorities fretting the company will not be able to pay its bills.
South Korean regulators allowed trading to be resumed Monday after Hanjin’s court receivership was granted, but the share price plummeted by the daily limit of 30 percent shortly after the market opened.
Shares recovered to be traded 1.6 percent lower at one point but soon fell back and ended at 1,070 won (97 cents), down 13.7 percent. The stock is now more than 40 percent from a month ago and 80 percent down over the year.
Under the receivership, the court will review the firm’s financial conditions and a revival plan to decide whether to put it under a court-led recovery program or to declare it bankrupt.
Hanjin is required to submit its revival plan by November 25.
The company also filed for bankruptcy protection in the US Friday to protect its vessels from being seized by creditors, the Wall Street Journal reported.
If the filing is recognized, the court will block creditors in the US from seizing the company’s assets or launching other legal actions while its other bankruptcy proceedings are under way, the report added.
A Hanjin spokesman was not immediately available to confirm the report.
“Black Friday coming”
Nearly 80 Hanjin vessels have been either seized or denied cargo handling or docking at ports in countries including the US, China, Japan, Spain and Canada, South Korea’s government said Monday.
Hanjin is seeking stay orders in 43 countries to protect its vessels from being seized with applications in 10 more to be made this week, an official from Seoul’s financial regulator said Monday.
An estimated 540,000 containers are expected to face delivery delays, according to media reports, raising concerns over delivery of goods ahead of Thanksgiving and Christmas holiday shopping in the US.