Hanjin Shipping claims no negotiation troubles

Debt-ridden Hanjin Shipping on Monday denied reports that its negotiations with foreign shipowners over charter fees are in choppy seas.

“We have completed our first round of negotiations, where we presented the need for a charter rate adjustment, and the talks are progressing as planned,” the company said in a statement released on Monday.

The shipping company said it is natural for negotiations to take time and that it is difficult to see tangible outcomes in early stages of talks, referring to cases of other shippers such as Hyundai Merchant Marine (HMM).

Speculation about negotiations began as the shipper’s largest ship charter company, Seaspan ULC, publicly refused to discount its charter rates, and Greek charter company Navios Maritime Partners impounded a bulk ship operated by Hanjin for three days in South Africa for failing to pay charter fees worth 100 billion won ($85 million) on time last month.

Hanjin operates 151 ships in total, 91 of which are chartered from foreign shipowners. Last year’s charter costs totaled roughly 1.11 trillion won.

The shipper has been working toward its self-rescue plan since May 4 and was considered on the right track when it joined the global shipping alliance dubbed THE Alliance, which fellow struggling shipping company HMM was unable to do.

That success allowed Hanjin Shipping to extend the expiration date on its corporate bonds for another four months at the first meeting with its bondholders on May 19.

But as the 100 billion won in unpaid charter fees was made public, the shipper’s fast track to recovery seems to have hit a stumbling block.

Joining the alliance and cutting charter rates by as much as 28 percent have been the major terms of the shipping companies’ creditors.

Should the shipper fail to lower charter rates, it will be placed under court receivership.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]