Hanjin Shipping to get $122 million in emergency financial aid from S Korea gov't

The South Korean government will extend a long-term loan of 100 billion won (S$122.8 million) to financially troubled Hanjin Shipping at low interest rate following its court receivership filing last week.

"The government agreed to provide cheap long-term loans to Hanjin Shipping if Hanjin Group or Chairman Cho Yang-ho offer loan securities that have asset value in Hanjin Shipping," said Saenuri policy chief Kim Gwang-lim after attending a ruling party-government meeting on Sept. 6.

Kim said the amount of government's financial support will be "100 billion won plus alpha," which will enable the container carrier to dock its vessels and offload cargo.

Related ministries will also help Hanjin Shipping to seek stay orders in dozens of countries to protect its vessels from being seized.

South Korea's Prime Minister Hwang Kyo-ahn has urged ministries to push ahead with contingency plans to unsnarl the chaos in the logistics industry after the country's largest ocean container shipper Hanjin Shipping filed for court receivership last week.

"Related ministries including the Ministry of Oceans and Fisheries should immediately take emergency transportation measures such as sending container ships to replace seized vessels to minimise disruption on trading companies," he said during a Cabinet meeting on Sept. 6.

After the firm slid into bankruptcy proceedings, vessels of the world's seventh-largest container carrier have been stranded at sea and ports which hurt supplies of retailers ahead of the holiday season.

"We've got to make sure that the crisis does not spread to the overall economy by preparing support measures for related firms," Hwang said.

hnpark@heraldcorp.com