This week is a make-or-break time for Hyundai Merchant Marine, Korea’s second-largest shipper. To stay afloat, the troubled company has to successfully complete its negotiations with foreign ship owners on cutting charter fees.

Last month, creditors agreed to restructure HMM’s debt on condition that the struggling shipper persuaded its ship owners to reduce charter fees by up to 30 percent. The deadline for the negotiations is Friday. 

HMM operates a total of 116 vessels, of which 83 have been leased from 22 foreign ship owners. It paid about 980 billion won ($830 million) in charter fees last year. As the shipper recorded an operating loss of 253 billion won in 2015, a 30 percent reduction in the fees is expected to provide it with much-needed momentum for a turnaround.

HMM is pushing for a fee reduction because the fees it currently pays are much higher than the market rates. It concluded charter contracts when global demand for shipping services was still high. But charter fees plummeted following the eruption of the global financial crisis in 2008.

The shipper says most of its ship owners have expressed willingness to endorse the restructuring plan mapped out by its creditors. But some still remain reluctant to cooperate. To wrap up talks with these dissenting ship owners, the company has invited them to Seoul.

HMM’s creditors, including the state-run Korea Development Bank, are strongly advised to provide maximum support for the desperate shipper to obtain concessions from the ship owners.

Creditors need to show their commitment to reviving the ailing shipper. At the same time, they would do well to convince the ship owners of the advantages of giving HMM a chance by cutting charter fees.

If HMM fails to reach an accord with its ship owners, it will have to file for court receivership. In that situation, the ship owners would have to sustain fee cuts far deeper than those proposed by the restructuring plan.

For the shipper, negotiations with its foreign ship owners are only the first huddle it is facing on its long path to survival. Another condition attached by its creditors is a successful rollover of bonds held by private investors.

HMM is planning a meeting with bondholders late this month. It plans to propose that they convert part of their bonds into equity. This offer would be attractive to those who are optimistic about the company’s prospects of turning itself around.

The shipper says if its talks with the ship owners and bondholders go smoothly, it would be able to join a global shipping alliance again.

Currently, HMM is a member of the G6 alliance. But other members of the group recently agreed to form a new alliance amid an ongoing reshaping of the global shipping industry.

HMM was excluded from this new alliance, while Hanjin Shipping, Korea’s largest shipper, was included. HMM said it would be accepted into the new group if its financial status improved through debt restructuring.

The government and creditors should ensure that HMM remains an alliance member, as it will not only speed up its turnaround but also help the nation foster the shipping industry.