A Shock Therapy for Floundering Shipper
The Korea Development Bank (KDB) has decided to mobilize former officials of now-defunct Hanjin Shipping to support Hyundai Merchant Marine (HMM), which is still in trouble despite massive financial support from the Korean government.
"We have come up with the idea of using a shock therapy as the shipping company is having difficulty normalizing its business," said an official of the KDB, the main credit bank of HMM. "We have prepared a pool of dozens of people."
HMM has been in deficit for three consecutive years and six months in a row. Without further support from the government, the shipping company is expected to fall into capital impairment, a state where liabilities exceed assets. According to an analysis of Samil PricewaterhouseCoopers, HMM’s shortage of funds will reach up to 6,372.3 billion won by 2022.