[THE INVESTOR] South Korea’s shipping industry, once the country’s backbone industrial sector before falling into a deep slump, could face multitrillion won losses and massive layoffs if Hanjin Shipping goes under court receivership, according to the Korea Shipowners’ Association.

The association estimated that placing Hanjin Shipping into court-led restructuring could cause some 9.24 trillion won (US$8.31 billion) in damages and around 1,193 employees working in the industry could lose their jobs. 



The amount could rise to 17 trillion won and 2,300 jobs when losses in the port and trade industries are included, it said.

“Hanjin Shipping is an independent company, but it is also the backbone of international trade, which export-driven South Korea relies on heavily,” said Cho Bong-ki, a senior official at KSA. 


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Hanjin Shipping, the country’s largest shipping line, submitted its self-rehabilitation plan on Aug. 25, but its creditors, including Korea Development Bank, expressed dissatisfaction, citing the company’s lack of commitment to tide over a massive cash shortage.

The fate of the beleaguered shipper now rests in the hands of creditors, who will decide whether Hanjin will be restructured or liquidated on Aug. 30.

Final agreement requires the approval of 75 percent of creditors, otherwise the firm will be placed under court-led restructuring.

By Park Han-na (hnpark@heraldcorp.com)