New | Hanjin gets US$45 mln credit line from Korean state lender

Korea Development Bank, the main lender to Hanjin Shipping Co., offered a conditional credit line of 50 billion won (US$45 million) to help ease supply-chain disruptions caused by the collapse of the nation’s biggest container mover.

The state-owned bank will extend the loan only if the funds pledged by Korean Air Lines Co., the largest shareholder, Chairman Cho Yang Ho and a former chairwoman of Hanjin Shipping are insufficient to help unload cargo from stranded vessels, KDB said in an e-mailed statement Thursday. The account receivables of Hanjin will be used as collateral for the loan, it said.

Shares of Hanjin Shipping rallied 30 per cent Thursday, rebounding from a record low, as the promise of the additional funds followed a Wednesday decision by Korean Air to provide 60 billion won in loans. Though the government estimates the company needs at least 600 billion won to cover unpaid costs such as fuel and cargo handling, the newly pledged funds may help Hanjin temporarily deal with the crisis.

“This is a temporary funding to get the cargo unloaded,” said Rahul Kapoor, a director at Drewry Financial Research Services Ltd. in Singapore. “As long as the ships are not unloaded, it’s adding up the bills for Hanjin. The longer this goes on, it’s going to get messier.”