[110116.EN.SEA] Hanjin, Hyundai Too Broke To Access Fund Designed To Help Sickly Sector

HANJIN Shipping and Hyundai Merchant Marine (HMM) are too poor to tap a South Korean state fund of US$1.2 billion expressly set up to help the country's struggling shipping and shipbuilding companies, reports IHS media.

That's because the fund is available only to companies with debt-to-equity ratios below 400 per cent. Hanjin’s debt ratio was 687 per cent as of September 30. Hyundai Merchant Marine’s was almost 980 per cent.

Hanjin and Hyundai Merchant Marine (HMM), have been selling assets to bolster liquidity in the face of losses.

South Korean Finance Minister Choi Kyung-hwan, said the fund is meant to assist the reorganisation efforts of struggling companies.

"The shipbuilding industry has been restructuring through capital increases and downsizing in order to restore profits, while shipping companies are working on their own to overcome liquidity issues," he said.

Hanjin and HMM have raised more than KRW5 trillion won by selling their profitable LNG shipping units and dry-bulk units, which has left both companies more narrowly focused on container shipping.

Source : HKSG.