Heung-A enters debt restructuringHeung-A Shipping, Korea’s fifth largest shipping company, has entered into a debt restructuring.
The coronavirus outbreak hit just as the company was dealing with the impact of the U.S.?China trade war, pushing it over the edge.
The troubled company published a notification Tuesday on the beginning of the process via the disclosure site of the Financial Supervisory Service (FSS).
Korea Development Bank, Heung-A’s main creditor, will lead the process.
The notification does not provide any detail of the restructuring process.
With its container and tanker carrier services focused on Asia, a slowdown in shipments triggered by the trade dispute and a recent outbreak of the coronavirus hurt the business of the mid-sized shipping company.
Excessive competition in its Southeast Asian service also hit hard.
Heung-A Shipping posted a 37.6 billion won ($31.6 million) operating loss in 2018, and the loss deepened last year at 46.9 billion won.
Founded in 1961, Heung-A ranks fifth in terms of order volume.
Hyundai Merchant Marine, Korea Marine Transport, SM Line and Sinokor Merchant Marine are the top four.
In response to the glut of shipping capacity in the market, Heung-A sold its container shipping division to Sinokor Merchant Marine last year.
Besides the selling of the division, the company also unloaded non-core assets.
The share price of the shipping company plummeted to the daily limit on Wednesday on reports of debt restructuring.
Shares of Heung-A Shipping plunged 29.92 percent to close at 274 won on Wednesday.
The benchmark Baltic Dry Index (BDI), an assessment of the average price to ship raw materials, has dropped to a four-year low.
BY PARK EUN-JEE [firstname.lastname@example.org]