Thirty three owners of container vessels chartered to shipping line Hyundai Merchant Marine (HMM) headquartered in South Korea, have again rejected the company’s plea to cut daily vessel hire costs.
Hyundai stated they were “fully focusing” on renegotiating the terms of its charter parties “ towards the end of April. Sources say that HMM was looking for a 25% rebate on the daily hire rates.
Ship-owners claimed in a letter on February 1st that HMM was unable to “continue to operate much longer without substantial relief from the ship-owners”. Nevertheless after weeks of discussion, ship-owners do not appear to be budging.
In order to remain liquid and restructure debt facilities, the financially-troubled shipping line sold its 22.43 % stake in Hyundai Securities $ USD 1,08 bn. South Korea’s largest retail banking group, KB Financial Group, bought the stake having been selected as the preferred bidder at the end of last month.
As a result HMM managed to secure some breathing space from its creditors at the end of March, who agreed to a three-month maturity extension on the company’s debts to try to normalize its financial situation and complete efforts aimed at boosting its liquidity. Hyundai has loans of $ 334 million maturing in 2016 and $ 530m in 2017.
The company entered into a voluntary agreement with its main creditor bank, the state-run Korea Development Bank (KDB), and other creditor banks, on 29 March, allowing the shipping group to roll over maturing debt and interest for three-months, but it was conditional on HMM cutting the amount paid in charters.
