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Hyundai Merchant Marine fails to roll over debt

Collected: 2016.03.19

Distributed: 2016.03.22

Source: Go Direct

Hyundai Merchant Marine Co. has failed to roll over debt coming due on Apr. 7. The liquidity-stressed Korean shipping company had discussed with creditors to extend payment on the maturing unsecured bond worth 120 billion won ($103.3 million) by three months, but the debenture holders rejected the idea on Thursday.

Earlier, creditors led by the state-run Korea Development Bank (KDB) proposed debt rescheduling and a cut in chartering commission by overseas ship owners as a condition for their support for Hyundai Merchant Marine.

Hyundai Merchant Marine plans to convene a meeting soon again with all creditors who hold the company’s debenture that matures this year. The company wants to sell an idea to investors to convert its debt into equity.

The company has a total of 360 billion won in debt coming due this year. The company plans to continue discussion even with deferred fees after the April debt matures. A company official said the roll-over idea was rejected but it is difficult to repay the maturing debt because the company is scarce of cash.

KDB and other creditors, including commercial banks, debenture holders, shipping finance lease providers and charterers came up with a conditional voluntary agreement to guarantee Hyundai Merchant Marine’s support for survival of its stakeholders.

KDB tabled the agreement for a Mar. 22 creditor meeting with a goal to determine whether they execute the agreement before Mar. 29. KDB said the conditional agreement will be pushed for on the assumption of reduction in chartering commission and fair debt rescheduling among all debt holders.

By Yoon Jin-ho

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