State-run Korea Development Bank (KDB), the main creditor of South Korea’s debt-ridden Hanjin Shipping Co., indicated that Hanjin Group will retain management control over the shipper if it extends funding support of at least 1 trillion won ($846 million) even creditors would own the company through debt-to-equity and other relief program.

The additional yield from creditors follows their offer to shoulder 20 percent of 1.2 trillion won the company needs to raise to stay afloat until next year if the parent group manifests will to help save the shipper by putting together funding of 1 trillion won.

Creditors have been demanding active role from the owner family and parent group, threatening to send the shipper to court receivership otherwise.

Hanjin Group Chairman Cho Yang-ho has been reluctant to idea of an additional bailout in fear of further dent on Korean Air and the entire group.

In case of another Hyundai Merchant Marine Co. in similar troubled waters, chairwoman Hyun Jeong-eun voluntarily offered to give up management control after reducing capital and donating her own wealth.

Creditors believe that if Hanjin Group is able to secure maximum 1.2 trillion won - based on the presumption that chartering fees are lowered by 21 percent - it will be able to keep management control regardless of whether or not it is granted the right of first refusal, an option that gives priority to Hanjin Group to redeem its controlling stakes later.

In the typical case of restructuring troubled large company, creditors temporarily run it after bailout and debt restructuring and offer to sell the stake back to the chaebol owner or parent group by giving preferential right.

But Hanjin Group won’t lose management right if group affiliates pitch in with cash assistance to the shipper, a creditor bank official said.

By Kim Jung-hwan and Chung Seok-woo

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