South Korea’s bankrupt Hanjin Shipping Co. and its court administrator has sought stay order action from 43 overseas jurisdictions to prevent seizure of vessels and decline of port leave and entry that has created a havoc on maritime traffic and delivery schedules.

The Seoul Central District Court requested counterparts around the world for an order to suspend judicial proceeding for Hanjin Shipping vessels after the shipper has filed for court receivership.

Hanjin Shipping fleet of 141 vessels are said to have come under seizure or barred from leaving the ports in Singapore, the United States and elsewhere after its assets came under court protection and was kicked out a global alliance that allows various freight and other port service benefits. Even upon arrival, many vessels were declined help in unloading as the shipper has been overdue in payments.

To prevent further damage, the government hinted that it could allow banks to grant new loans to Hanjin Group if it offers collateral to provide the funds to the troubled shipper.

A senior official from the Financial Services Commission (FSC) said on Sunday that Korea Development Bank (KDB) and other creditor banks are inclined to provide loans to Hanjin Group if it seeks them backed by various assets held by its affiliates.

“There is the option of Hyundai Merchant Marine buying the seaway operation rights, ports, and terminals from Hanjin Transportation Co. and Hanjin Shipping to get cargo transportation back in order,” he said, adding that the initiative must be made by the parent group.

But Hanjin Group cannot afford to seek out new loans for the shipping unit that it has given up as its flagship company Korean Air too sits on astronomical debt ratio of 1,082 percent.

The court indicated that it could study the option of saving the company if there is will from creditors.

The dealing with the insolvency of the country’s largest cargo carrier has been messy with the finance ministry and the ministry of oceans and fisheries arguing over what office should spearhead the restructuring of the shipper. They ended up agreeing to joint responsibility. The government and its state-run creditor, however, agreed to deny the option of providing debtor-in-possession financing.

By Kim Jung-hwan and Chung Seok-woo

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