South Korea’s Hanjin Group is expected have stronger units like Korean Air help out their troubled affiliate Hanjin Shipping through new share purchase and negotiate for cut in charter fees to up to 28 percent to normalize the country’s largest cargo carrier.

The group is fine-tuning a new rescue package for Hanjin Shipping to submit the plan to state-run Korea Development Bank and other creditors within the week, according to financial and group sources Monday. Creditors warned that they could send the shipping company to court receivership once the temporary relief from creditors’ workout program ends on Sept. 4, demanding more group support for the company in order to prevent insolvency.

The shipping company is also required to reschedule terms with bond-holders and cut charter fees to help to fight liquidity crisis.

The company is near persuading Seaspan Corp., a container ship-leasing company in Canada that remains most recalcitrant against lowering charter rates, to cut the vessel lease fees to 27 percent to 28 percent from current levels.

Ship financing remains a challenging issue. Domestic creditors agreed to extend the maturity period, but no progress was made in talks with foreign creditors.

To help immediate liquidity, the group is to have Korean Air and other Hanjin companies chip in to help the shipping company raise up to 400 billion won through rights offering, Hanjin Shipping also will accelerate efforts to sell overseas terminals and other assets.

If creditors endorse the self-rescue plan, they will re-assess how much Hanjin Shipping needs to run business normally to decide converting around 700 billion won of 5.6 trillion won worth debt into equity. The company would be able to negotiate better for more favorable terms with foreign lenders if it gains support from local creditors.

By Kim Jung-hwan and Chung Seok-woo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]