South Korea Will "Support HMM by Executing Mega Container Ship Contracts"

The troubled shippers' debt adjustment process is in the final stage and said to be a success.

Hyundai Merchant Marine (HMM) says its debt adjustment process is now at the final stage, with its debt ratio forecasted to drop to 226 percent by the end of this year and its charter negotiations to be concluded as quickly as by the end of this week.

In an emailed statement, HMM disclosed that its largest shareholder will change from Hyundai affiliates to its creditors, including the Korea Development Bank, with HMM shares held by Hyundai affiliates decreasing from 22.6 percent to 1.4 percent and the creditors' portion increasing to 40 percent.

The change of charter contract is scheduled to be announced by the end of this month, and HMM intends to obtain agreements from The Alliance members by the end of June so the company can join the new shipping alliance.

This follows months of readjustments to settle the troubled shipper's debt, which stands at about KRW 5.2 trillion ($4.36 billion) in total; last year, HMM paid KRW 1.9 trillion ($1.59 billion) to 22 owners of chartered ships, equivalent to 32 percent of its annual sales of KRW 5.8 trillion ($4.87 billion).

Given these latest developments, HMM says that the South Korean government "now plans to support HMM by executing mega container ship contracts through shipping finance", but it did not elaborate on when these contracts would be executed.

Earlier this month, HMM announced that the investors who attended a meeting to discuss a debt recast offer accepted the company's conditions, which include swapping KRW 800 billion ($672 million) with HMM stocks.