[Aju News DB]
Bondholders approved Hyundai Merchant Marin's proposal to recast debt as South Korea's second largest container carrier was involved in tough talks with foreign ship owners on slashing high fees on chartered ships.
The agreement came at the first meeting of bondholders and Hyundai Merchant, which wanted more than half of their debt swapped for stocks with the remainder to be paid back after two years. The total amount of debt to be rescheduled would reach about 804 billion won if a series of talks with bondholders are successful on Tuesday and Wednesday.
Last week creditors endorsed a debt-for-equity swap worth 680 billion won (572 million US dollars) for Hyundai Merchant saddled with a total debt of more than five trillion won at the end of March.
Key creditor Korea Development Bank, however, warned the debt-for-equity swap would be null and void if Hyundai Merchant failed to reach an agreement in negotiations on lowering rates on leased vessels. Financial regulators have said that a failure in talks means court receivership.
Financial Services Commission (FSC) chairman Yim Jong-yong said Monday that Hyundai Merchant had made "significant progress" in talks with foreign ship owners.
The company has been the first serious target of creditor-led restructuring that could change the picture of the world's shipping industry hit by falling freight rates. A prolonged slump in global trade and overcapacity have depressed transportation rates, causing shipping lines to stem losses through job cuts and consolidation.
Hyundai Merchant has been left out of a new global shipping alliance formed by six Asian and European container-shipping operators to challenge the dominance of global giants such as Maersk Line and Mediterranean Shipping. Hanjin Shipping was included in the alliance, though it was also put under a creditor-led restructuring plan.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
