South Korea’s economy would be hit by damages in the amount of some USD 19.1 billion if the country losses two of its major shipping companies Hanjin Shipping and Hyundai Merchant Marine (HMM), The Korea Herald cited the projections from the Korea Shipowners’ Association.
According to the association, if these shipping firms disappear, the situation would prompt other major shipping companies to pull out of South Korea’s Busan Port, as they are currently present in the port in order to keep Hanjin and Hyundai monopolizing the market.
Additionally, the association said that this would lead to a loss of some 5,400 jobs, while smaller shipping companies would also suffer damages.
Earlier in June, South Korea said that it was considering to merge the two cash-strapped shipping firms if they succeed in normalizing their management.
HMM’s creditor group agreed on the company’s debt restructuring proposal on condition that the shipping firm successfully concludes its negotiations with bond holders and shipowners.
HMM has already gained bond holders’ approval for its debt restructuring proposal.
The normalization of the company’s business would pave the way for the struggling firm to join the new global shipping alliance.
Hanjin is required to make its self-rescue efforts to secure liquidity as HMM did.