South Korea's top financial regulator on Wednesday said the country's largest shipping line, reeling from huge debts, should stand on its own feet or face court receivership.

Yim Jong-yong, chairman of the Financial Services Commission, reaffirmed that the government has no plan to offer financial aid to Hanjin Shipping Co.


"Hanjin Shipping is in talks over ship mortgage loans with 34 financial institutions" in addition to charter rate negotiations and private debt rescheduling efforts, he said in a monthly press briefing.

The government will let the company resolve its liquidity crisis on its own and handle the issue in accordance with "principles" in case of failure, Yim stressed.

Hanjin is expected to suffer a cash shortage of as much as 1.2 trillion won ($1.1 billion) in the next 1 1/2 years.

Creditors have called on Hanjin to first cover 700-900 billion won through its self-restructuring before they provide any financial support. But Hanjin claims it is hard to finance more than 400 billion won.

On the nation's struggling shipbuilding field, Yim said the government remains committed to efforts to keep the big-three firms stay afloat.

"Daewoo Shipbuilding & Marine Engineering Co., as well as Hyundai Heavy Industries Co. and Samsung Heavy Industries Co., are implementing an unprecedented large-scale self-restructuring plan worth a total of 10.3 trillion won," he said.

The outcome of external consulting on the direction of the shipbuilding industry will be available in late August, he added.

Asked about the future of Woori Bank, Yim made it clear again that the government won't rush to sell off its controlling stake in the bank.

"As we said many times, the government is resolved to push for the privatization of Woori Bank," he said. "But what's most important is a successful sale. The government is still in efforts to secure preconditions for ways to succeed in it."

The government, which owns a 51 percent stake in the bank through the state-run Korea Development Insurance Corp., is not in a stage yet to reveal when to begin a formal disposal process and no decision has been made either, he added. (Yonhap)