Executive Briefings

Judge Orders Hanjin to Sell Ships, Return Chartered Vessels

Hanjin Shipping has to return chartered-in ships to owners and to sell as much of its own fleet as it can, a South Korean bankruptcy judge said Monday.

Judge Orders Hanjin to Sell Ships, Return Chartered Vessels

Hanjin is still working on a restructuring plan, and it has already begun returning chartered vessels in an attempt to reduce its overhead; its charter fees amount to millions per day. The judge's order to sell vessels means that the firm will be much smaller if it manages to avoid total liquidation - a fate the court will decide sometime in December.

Mike Radak, chief operating officer of Hanjin Shipping America, told the LA Times that the carrier was giving back chartered vessels as soon as they were unloaded. "Once it's empty, we hand the keys over to the chartering company," he said.

Radak said that his understanding is that all of the line's owned vessels would be brought back to Busan as they were free of cargo.

The sale of Hanjin's ships is expected to put further downward pressure on weakened prices for older container tonnage, especially smaller, less efficient vessels. In addition, Hanjin-chartered vessels coming off hire may have difficulty finding new employment in a saturated market and many are likely to go into layup, analysts say.

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Hanjin is still working on a restructuring plan, and it has already begun returning chartered vessels in an attempt to reduce its overhead; its charter fees amount to millions per day. The judge's order to sell vessels means that the firm will be much smaller if it manages to avoid total liquidation - a fate the court will decide sometime in December.

Mike Radak, chief operating officer of Hanjin Shipping America, told the LA Times that the carrier was giving back chartered vessels as soon as they were unloaded. "Once it's empty, we hand the keys over to the chartering company," he said.

Radak said that his understanding is that all of the line's owned vessels would be brought back to Busan as they were free of cargo.

The sale of Hanjin's ships is expected to put further downward pressure on weakened prices for older container tonnage, especially smaller, less efficient vessels. In addition, Hanjin-chartered vessels coming off hire may have difficulty finding new employment in a saturated market and many are likely to go into layup, analysts say.

Read Full Article

Judge Orders Hanjin to Sell Ships, Return Chartered Vessels