South Korea’s Hanjin shipping company collapsed in September, owing $8 billion in debt. It left 97 ships stranded around the world unable to pay for fuel or other fees, with $14 billion worth of goods stuck on board.

“These ships cost the shipowner about $18,000 a day to put to sea, some of them have been accepting day rates of $750 a day. They are losing money hand over fist,” said Teresa Lloyd, chief executive of Maritime Industry Australia.

In Australia, the Hanjin California was seized for a month in Sydney and the Hanjin Milano was stranded outside the Port of Melbourne. Woolworths, Big W, Masters and Pacific Brands all had goods tied up on those ships.

“Hanjin had been in financial difficulty since the GFC in 2008. There’s an oversupply of vessels in the market,” said Ryan Eagle, partner at Ferrier Hodgson.

“Hanjin had been loss making for a number of years, particularly the last 5 years.”

With the stranded ships finally unloaded, attention has turned to selling the shipping company’s assets.

“They’ve sold in the order of $40 million which is a very small part of overall debt of $8 billion,” said shipping lawyer Ernie van Buuren, who represents a number of Australian businesses owed money by Hanjin.

“They’re small amounts in terms of service providers like tug operators, pilots in Australia, to larger amounts running in to the millions of dollars,” he said, adding that his clients are unlikely to see any of that money.

“They’re not secured creditors which is part of the problem. Some of them are participating in the rehabilitation procedures in Korea at the moment.”

Rest at http://www.abc.net.au/news/2016-11-28/collapse-of-hanjin-tip-of-shipping-industry-iceberg/8064686?section=business

Source: abc.net
2016-11-29

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