Korean Air approved loan to aid the troubled shipping firm Hannjin. (Photo: Stock File/FIS)
Hanjin’s shares grow 28pc after loan approval
SOUTH KOREA
Friday, September 23, 2016, 03:20 (GMT + 9)
Hanjin Shipping’s shares have experienced a 28 per cent growth after the board at Korean Air Lines, the firm's biggest shareholder, approved a loan for the troubled shipping firm.
The loan would amount to KRW 60 billion (USD 53.8 million), which, according to the airline company, will be provided as soon as "the necessary procedure is completed", without elaborating further, BBC News informed.
Hanjin Shipping had sought bankruptcy protection earlier this month as the troubled firm was saddled with debts of more than USD 5 billion.
Estimates from the South Korean government have shown the company needs at least KRW 600 billion (USD 537.9 million) to cover unpaid costs such as fuel and cargo handling.
Earlier this month parent company Hanjin Group said it would inject 100 billion won in fresh funds to resolve the disruptions to the cargo transport currently stuck at sea.
Hanjin needs to submit a rehabilitation plan in December, and the firm's creditors will need to agree on that plan.
The shipping firm has been granted stay orders to protect its ships from seizure in various ports including South Korea, the United States and Japan. But dozens of other ships are anchored off ports while the company tries to secure funds to unload cargo.
Hanjin has been unprofitable for four of the past five years but the global economic downturn in recent years has affected profits across the cargo shipping industry.
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