Hanjin bankruptcy is ‘rock bottom point’

Drewry analyst Rahul Kapoor does not expect more liner companies to fold in the future.

No more bankruptcies are expected in the liner sector following the demise of Hanjin Shipping, according to an analyst from Drewry.

Rahul Kapoor, financial research services director at Drewry, told Bloomberg Markets: “Hanjin was a big carrier and what happened was unexpected.

“It had been making losses for a few years and it was a debt situation where the unit cost was pretty high and the company could not sustain it.

“I think the Hanjin bankruptcy did mark the bottom.”

The analyst added the Korean government had to choose between Hanjin and Hyundai Merchant Marine (HMM) and decided to go with the latter.

Today marked the end of Hanjin, previously the world’s seventh largest carrier, after 40-year of business.

The South Korean company filed for bankruptcy protection in late August 2016 and was officially declared bankrupt by the Seoul Central District Court earlier today.

A bankruptcy trustee will organize the sale of Hanjin’s assets, which VesselsValue estimates at around $986m.

Kapoor said no more bankruptcies liner are expected in the future and big players have already moved toward snapping-up Hanjin assets.

“There are still some small players out there but, mostly, consolidation is behind us 80%,” he said.

Hanjin creditors are required to report their right to claim debts by 1 May.

At its peak, Hanjin had 1,300 employees and a fleet of 97 containerships and 44 bulkers.

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