The Korean giant seems irremediably condemned

The first South Korean and seventh world shipping company in container traffic, Hanjin Shipping is going bankrupt after the withdrawal of support from its creditor banks. With Korea Development Bank (KDB) at the head, spokesperson for the rest, it was announced that they would end support for Hanjin Shipping from next week, thus rejecting plans to try to reduce the debt of $4.5 billion it held by the end of 2015. The company has just over 1,500 workers and moves 2.9% of international traffic.

In the face of the rumours of a likely merger with Hyundai Merchant Marine, which has the approval of the South Korean government, its main creditor, the Korea Development Bank has assured that it is not planned to merge both companies, despite the fact that Hyundai, today's world number 14, would strengthen its position and the resulting one would climb to the fifth world position. Hanjin has recognized that ports such as Valencia in Europe, Savannah in the US, and Shanghai and Xianmen in China have not allowed them to attract their ships in the fear that they could charge the fees. In the port of Valencia the company keeps its ships in the fondation area. Also in the Port of Algeciras there is some uncertainty as one of its terminals, TTI is promoted by the South Korean group Hanjin, and the other, APM Terminals operates with ships of the company. If the bankruptcy of Hanjin Shipping were to take place, this would be the biggest bankruptcy of the maritime industry for many decades.

The national bank of Korea, KDB, had reported on the same Wednesday that the company's creditors would not continue to finance it. The banks consider that the plan presented by the Hanjin Group, owner of Hanjin Shipping and Korean Air Lines, is insufficient to address the company's debt. While the judicial process should last between one and two months, it is expected that in this case it will be resolved within a shorter time. The Korean giant has recorded significant losses caused by the deep crisis in the sector and by a stop in China's development. This situation is not new in Korea, as its second Hyundai Merchant shipping company was saved from bankruptcy after reaching an agreement with the creditors, following the suspension of payments. If the company's bankruptcy is realized, it will be the largest in the sector in history.