Hanjin shares dive on European sale news
Shares in troubled South Korean shipping giant Hanjin plunged 12 percent Monday after the company announced plans to shutter its European business, fuelling fears it could be heading towards liquidation. The firm has applied for court approval to close all of its units in more than 10 countries including Germany, where it has its regional headquarters, a spokeswoman told AFP. Hanjin -- the South's largest shipping company and once the world's seventh biggest -- is seeking bankruptcy protection at home and in the United States after creditors rejected a plan to deal with a $5.37-billion debt load. Its bankruptcy would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades owing to slumping global trade and a slowdown in China. The company expects to start the closure process this week after obtaining approval from the Seoul Central District Court, the spokeswoman said. The news sent its share price tumbling nearly 14 percent at one point before closing down 12 percent at a four-week low of 1,005 won in Seoul. Almost 80 percent of Hanjin's market value -- or the equivalent of about 950 billion won ($840 million) -- has been wiped out in the past year as the firm's financial woes deepen. Its share price hit a record low of 866 won on September 21 after a Seoul bankruptcy court expressed doubt over the company's future viability. "It is extremely hard to predict the future of the firm at this point, so investor sentiment is greatly swayed by every single media report," Hwang Sei-Woon, a researcher at Korea Capital Markets Institute, told Yonhap news agency. Hanjin has been given until November 25 to submit a business revival plan to the Seoul bankruptcy court, which will then decide whether to put the company under a recovery programme or wind it up. The firm said Friday it was considering selling its 54-percent stake in the Long Beach Terminal in California -- one of the company's largest assets reportedly valued at around 100 billion won. "Hanjin is selling off a majority of its overseas networks, which are key assets in the shipping business... it appears that the firm will likely be liquidated," said Bang Min-Jin, analyst at Eugene Investment & Securities. Hanjin has been hit hard by the downturn in global trade. It posted a net loss of more than 473 billion won in the first half of this year alone, after racking up total net losses of about 1.2 trillion won over the past three years.
