© Hansenn
By Mike Wackett
With all attention on how long Hyundai Merchant Marine (HMM) can stave off bankruptcy, evidence of South Korean compatriot Hanjin Shipping’s equally severe cash crisis has emerged.
A prospectus from containership owner Seaspan Corporation yesterday reveals that Hanjin is significantly behind in its charter hire payments.
It says: “Hanjin charters three of our 10,000 teu vessels and four of GCI’s [an affiliate] 10,000 teu vessels under 10-year charter contracts with options to extend. Hanjin currently is making monthly payments under its charters with us, but, as of the date of this prospectus supplement, we have a total of approximately $11.6m of accounts receivable relating to the charters, all of which is past due.”
The Loadstar understands that the $11.6m of arrears relates only to the three Seaspan vessels, Hanjin Buddha, Hanjin Namu and Hanjin Tabul, delivered to Hanjin in 2014 and have eight years remaining at a fixed daily rate of $43,000.
Seaspan confirms in the prospectus, for five million of its Class A common shares, filed with the US Securities and Exchange Commission, that it received a request from Hanjin for a reduction in charter rates for a period of three and a half years, in exchange for “securities in a restructured Hanjin”.
It says it rejected this request and that “neither Hanjin nor KDB [Korea Development Bank] can change the charter rates in the voluntary restructuring without our consent”.
Seaspan cautions investors that a failure by Hanjin to make charter payments could result in a default of its own financing agreements for the vessels.
But it adds that a breach of the charter parties would permit it to “arrest the applicable vessels, terminate the charters and seek to recharter the vessels out”.
This would further materially harm Hanjin’s business and restructuring efforts.
The amount of the charter hire arrears by Hanjin now admitted by Seaspan is surprising, given that at the end of last month CEO Gerry Wang stated: “We have not received any request from Hanjin to renegotiate charter hires.”
During the Q1 results presentation Mr Wang said that the carrier “continued to make charter hire payments regularly” and that he “did not anticipate any charter breaks”.
Meanwhile, a broker source told The Loadstar today that bulk and containership owners were deciding what to do about late charter hire payments by HMM.
The carrier is suffering a severe liquidity crisis ahead of an expected decision by its creditors to put the company into court receivership. He had heard that “it was only a matter of time” before one of the smaller shipowners arrested a ship.
Today HMM said the KRW1.24 trillion sale of Hyundai Securities would be “wrapped up” this month, thereby easing the group’s short-term liquidity problems.
In an attempt to reassure to its business partners, it added: “The cash acquired from selling Hyundai Securities will only be used to stabilise HMM’s operation.”
Vessel arrest ratchets up pressure on Hanjin Shipping
In a sign of just how tough a financial position hard-up Hanjin Shipping really is in, one of its ships has been arrested. The Hanjin Paradip, an 82,158 dwt bulker, owned by the Korean firm, was detained in Richards Bay on May 24 due to unpaid charter fees to an unspecified owner.
Hanjin Shipping, which has entered restructuring, is negotiating with tonnage providers to get rates cut on its chartered in fleet, a crucial first step outlined by creditors who have warned the line it will face court receivership if it fails to get deals fixed with its tonnage providers.
“There were some arguments with a charterer and we are doing our best to resolve this problem as soon as possible,” a Hanjin spokesperson told Splash today, adding that the company is in the midst of selling various assets and once these sales go through the bulker wrangle in South Africa should be fixed by the end of the month.
Comments
Post a Comment