Cho Yang-ho gives up managerial control over Hanjin Shipping

Cho Yang-ho gives up managerial control over Hanjin Shipping. April. 23, 2016 07:22. by 강유현기자 yhkang@donga.com.

Hanjin Group Chairman Cho Yang-ho has decided to give up his managerial control over Hanjin Shipping, and apply for joint management (self-rescue measures) by creditors.

Following suit of Hyundai Merchant Marine that has already started self-rescue plan, Hanjin Shipping, the nation’s largest and the world’s ninth largest shipping company, announced a plan to apply for a self-rescue plan. As a result, Korea’s two largest shipping firms have entrusted managerial control to the creditors, including Korea Development Bank.

Hanjin Shipping and its majority stakeholder, Korean Air, held respective board meetings on Friday, and will apply for a self-rescue plan for Hanjin Shipping on next Monday, and seek normalization of the shipping company’s management based on a self-rescue plan in order to improve its financial structure and normalize management.

As part of efforts to improve its financial structure, Hanjin Shipping had mobilized about 2.5 trillion won (2.2 billion U.S. dollars) through sell-off carrier ships and capital increase since 2013.

Despite its operating profit of 36.9 billion won (32.3 million dollars) last year, the shipping industry has continued to struggle amid a prolonged economic recession with its liabilities of 6.6402 trillion won (5.8 billion dollars) and debts of 5.6 trillion won (4.9 billion dollars).