The financially troubled Hyundai Merchant Marine Co. said Tuesday that its creditor-led restructuring scheme will be extended by one month to late July as its bid to join a global shipping alliance takes longer than expected.
In April, its creditors, led by the state-run Korea Development Bank, approved the shipper's restructuring plan in return for the company meeting three key prerequisites -- a debt recast, a charter rate cut and an inclusion into a global shipping alliance.
The creditor-led tough restructuring move was originally set to end later this month.
Earlier, Hyundai Merchant said its talks to be part of the world's largest shipping alliance have made significant progress, raising hopes that the negotiation will soon be completed.
Hyundai Merchant said it has been seeking to join the group, 2M, spearheaded by AP Moller-Maersk A/S.
Membership in a global alliance is very important for the shipper to take on bigger rivals amid a glut in capacity, which has led to a drop in freight rates.
Hyundai Merchant and Hanjin Shipping, saddled with mounting debts and falling freight rates, have been dogged by their creditors to implement thorough restructuring schemes.
Among others, they have been pressed to cut higher charter rates and reschedule debts owed to private investors.
Earlier this month Hyundai Merchant reached an agreement with owners of its chartered ships to cut leasing rates by slightly over
20 percent over the coming 3 1/2 years, which Hyundai Merchant claims will save some 530 billion won ($455 million) in total.
Also, bondholders of Hyundai Merchant Marine approved a 804.2 billion-won debt rescheduling proposal, under which more than half of its debt will be swapped for the shipper's stocks and the remaining debt will be paid back in two years.
The creditors also agreed to swap 680 billion won worth of debt for the shipper's stocks as part of an effort to keep the shipper afloat. Hyundai Merchant had debts of 5.2 trillion won as of the end of March. (Yonhap)
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