Hanjin Shipping shareholders approved detailed restructuring and rescue plan, which aims to save the company from finance troubles and low liquidity. The largest shipping operator in South Korea took several steps during the last months to avoid the court receivership with creditors, but low freight rates and delay of the world economy continue to struggle over the cash flows and increasing debts. According to the detailed restructuring and rescue plan of Hanjin Shipping, the company may receive finance aid from the government and shareholders, which must improve the finance condition of the troubled company.

The Board of Directors already proposed IPO for 360 million USD, but shareholders denied and urged management to attract at least 700 million USD by sale of shares and assets. In April, the creditors of Hanjin Shipping approved debt restructuring and later started the restructuring.

Over the weekend Hanjin Shipping announced major progress in negotiations with tonnage providers and lenders. Crucially, Seaspan has agreed to reduce the charter rates, while foreign banks such as Credit Agricole will consent to a delay in the repayment of loans.

“With the charter rate cut talks completed, it could have the effect of saving some 718 million USD in cash, and we will have the effect of raising a total of 1.13 billion USD when a delay in loan repayments is considered”, said Hanjin Shipping in official statement.

According to the Korea Shipowners’ Association, the court-led restructuring could cause some 8.31 billion USD in damages and around 1,193 employees working in the industry could lose their jobs.

“Hanjin Shipping is an independent company, but it is also the backbone of international trade, which export-driven South Korea relies on heavily”, said senior official at Korea Shipowners’ Association, Cho Bong-ki.

Maybe the negative effect from the company’s restructuring may extend and cost the job for 2,300 jobs.