Financially troubled Hanjin Shipping Co. has not made any progress in its negotiations with the owners of its chartered ships to cut leasing rates, one of the key preconditions set by its creditors to avert court receivership, industry sources said Thursday.
According to the sources, the country's No. 1 container shipping line had contacted the owners of its charter fleet to slash the rates, but failed to receive any "positive" responses from them.
The shipper's struggle for the charter rate cut is in stark contrast to its smaller local rival, Hyundai Merchant Marine Co., which has reported "significant" progress in its charter rate reduction talks.
Hyundai Merchant, the country's No. 2 shipping line, also won approval from its bondholders for some 800 billion won (US$671 million) worth of debt rescheduling proposals.
The sources said Hanjin Shipping has to negotiate with a large number of shipowners, which means that its talks with them may be tougher.
Also, a vessel operated by Hanjin Shipping was impounded for three days in South Africa for unpaid charter fees, raising concerns that the shipper's financial status has dramatically worsened.
"We are working hard to produce the best results at an earlier date," said an official at Hanjin Shipping.
Last month, creditors of Hanjin Shipping accepted the troubled shipping giant's debt restructuring plan, also granting a three-month suspension on all payments of principal and interest.
But the creditors conditioned that the self-rehabilitation program will only be effective as long as all of the company's bondholders, lenders and owners of the ships chartered by Hanjin also remain committed to the self-rescue plan.
Last month, the shipper's bondholders approved some 36 billion won worth of debt recast proposal.
Meanwhile, the Hanjin Group, the parent company of Hanjin Shipping, and its chairman Cho Yang-ho have agreed to give up their managerial control of the shipping unit under the self-rescue plan.
In 2015, Hanjin Shipping posted a net profit of 3 billion won, a turnaround from a net 423.3 billion won loss in the previous year.
The company has to pay off or refinance some 500 billion won worth of debt that will mature before the end of June. The company-proposed plan includes raising some 400 billion won through asset sales.
As of end-2015, the company's total debt reached 5.6 trillion won.