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Hanjin Shipping Heads for Bankruptcy After Creditors Cut Cord

South Korea’s Hanjin Shipping Co., one of the world’s major shippers, could be on the brink of bankruptcy.

The shipping company’s creditors said they would no longer provide financial support and Hanjin will meet this week to discuss its plan forward, which could include a bankruptcy filing, The Wall Street Journal reported.

If Hanjin can’t press on, it would be the industry’s largest shipping company to ever go under.

Smaller carriers have already gone bankrupt in this challenging shipping market where demand is down, costs have plummeted to never-before-seen lows, trade flows are slowing and operators are putting out bigger ships and forming alliances to keep costs down.

Hanjin, which handles most of Korea’s exports along with rival Hyundai Merchant Marine, has been reporting losses for a few years, and for the first quarter ended in May, net loss totaled $221 million. The container division lost $74 million and the bulk division was down $78 million.

The company said in a statement at the time, “Hanjin Shipping’s operating profit for the container division decreased as to the decline of total sales caused by record breaking low level of freight rate and increased gap between the supply and demand within the market. Its bulk business also suffered from lowest ever freight level triggered by low iron ore and coal demand during the first quarter.”

Hanjin has been trying to revive itself as part of a debt revamp program since May, according to the Journal, but in order to pay back its mounting debt (which reached as high as $5.9 billion at the end of last year), the company would need at least one trillion Korean won ($891.6 million) to cover arrears and operations. Hanjin, which is part of the conglomerate that operates Korean Air Lines, had said it would raise as much as $446 million with asset sales and financial aid from Korean Air.

But Hanjin’s main creditor, the Korean Development Bank, doesn’t like the company’s latest funding plans, which they said fell short of their demands.

“A creditor-led restructuring will end now. The company will have to find its own way to survive,” an official at Korea Development Bank, told the Journal.

Hanjin’s shares fell 24 percent Tuesday before trading was suspended.