Korean Air Lines shares suffer biggest loss in two years
Korean Air said on Wednesday it will provide 150 billion won to Hanjin Shipping to help ease the company’s “temporary” liquidity shortage. Excess shipping capacity and a slump in freight rates have caused shipping companies including Hyundai Merchant Marine and STX Pan Ocean to lose money in the first half of the year. The announcement came after Korean Air last week posted a loss in the first nine months due to weak Japan travel demand.
“While it’s not a lot of money, the airline industry isn’t doing all that well,” said Um Kyung-a, an analyst at Shinyoung Securities. “Korean Air also has a lot of debt coming due next year.”
Korean Air is the biggest shareholder of Hanjin Shipping Holdings, the holding company that owns the largest stake in Hanjin Shipping. Both are members of Hanjin Group.
Hanjin Shipping is considering raising 300 billion won through share sale and loans, Korea Economic Daily reported, citing a company official it didn’t identify. The company is considering a share sale and loans, said Sonya Cho, Hanjin Shipping spokeswoman. Details haven’t been finalized, she said.
The company has about 745.1 billion won in bonds and loans maturing next year, compared with 47.7 billion won in 2013, according to data. Hanjin Shipping may post a loss in the third quarter, typically the best period for shipping companies, Daishin Securities said in a Sept. 30 report. Bloomberg
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