- 60 billion won to be given only after airline gets collateral
- Money is needed for payments to unload cargo from Hanjin ships
Korean Air Lines Co., the biggest shareholder of Hanjin Shipping Co., said it will provide 60 billion won ($54 million) in funds as part of efforts to ease a supply-chain disruption after South Korea’s largest container line filed for court protection.
The carrier will give the money only after Hanjin Shipping puts up its stake in a terminal at Port of Long Beach as collateral, Korean Air said in a text message after a board meeting Saturday. The board had failed to reach a decision in two previous meetings.
The money will be used for payments to unload cargo from some of Hanjin’s vessels that have been stranded near ports in North America, Europe and Asia after the shipping company filed for court receivership on Aug. 31. Hanjin Group, which controls Korean Air, had said it would provide 100 billion won including 40 billion won from Chairman Cho Yang Ho. South Korea’s ruling Saenuri Party also asked the government to offer about 100 billion won in low-interest loans on condition the owners provide collateral.
Hanjin Shipping operates the Long Beach terminal in partnership with Mediterranean Shipping Co.
The Korean container line on Friday won court protection for its U.S.-bound ships under Chapter 15 of the Bankruptcy Code, which shields foreign companies from lawsuits by U.S. creditors while they reorganize in another country. The decision will allow goods on at least four Hanjin ships to come into port in the U.S. and be unloaded without fear of having them seized by creditors.
About $14 billion worth of cargo for companies such as Samsung Electronics Co. are stuck on 92 Hanjin vessels, including 78 container ships, stranded at 51 ports in 26 countries.
Some companies have unloaded their cargo from the vessels and are looking at alternative ways to transport their goods, according to authorities in the South Korean port city of Busan. Container lines including Hyundai Merchant Marine Co. and A.P. Moeller-Maersk A/S are offering extra services to take on some of Hanjin’s containers left stuck at ports.