Weeks of disruptions in global maritime traffic following the collapse of the world’s seventh largest container carrier Hanjin Shipping Co. due to a liquidity shortage is expected to ease as the shipper is expected to secure a total of 200 billion won ($181.4 million) in emergency funds that would be enough to unload the cargoes that have been stranded at sea.

According to multiple sources from Hanjin Group and the shipping industry on Friday, Hanjin Shipping will likely be allowed to use 40 billion won out of 60 billion won that the shipper has collected as freight charges since it filed for court’s protection on September 1 to unload the delayed cargoes. The rest 20 billion won was already injected to unload cargoes at the Port of Long Beach in the United States.

With the additional 40 billion won emergency fund, Hanjin Shipping would be able to set aside 200 billion won in total to normalize its shipping operations, which the Korean government presumes is enough to allow 33 vessels that have been denied to arrive at local ports to unload the delayed cargoes by next month. Many of the vessels that have been denied of call and unloading at overseas ports will also be able to process the delayed deliveries.

As of Friday, 62 Hanjin Shipping container vessels were stranded at sea - including 29 that need to unload cargoes at overseas ports and 33 that need to return back to Korea for unloading.

Apart from the latest 40 billion won, earlier in the week, the board of its largest stakeholder Korean Air Lines Co. approved the plane to provide an emergency fund of 60 billion won to Hanjin Shipping backed by accounts receivables. Separately, Hanjin Group Chairman Cho Yang-ho donated 40 billion won to Hanjin Shipping to ease cargo disruptions while Choi Eun-young, former Hanjin Shipping chairwoman, 10 billion won.

Hanjin Shipping also will be able to use 50 billion won worth of loans extended by its main creditor Korea Development Bank on collateral for the carrier’s accounts receivables if it uses up all of the 150 billion won. The Seoul Central District Court predicts that 200 billion won would be sufficient for the sinking country’s largest container carrier to normalize disruptions in maritime traffic.

The government expects that most of the stranded Hanjin vessels would be able to complete call and unloading of the delayed cargoes by the end of next month following the injection of the emergency fund and the completion of ongoing negotiation over cargo unloading at ports where vessels have not been seized.

By Kim Jung-hwan and Lee Seung-yoon

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