Seaspan Rejects Hanjin’s Proposal on Charter Rate
By Aiswarya Lakshmi
June 19, 2016
The container ship-leasing company Seaspan Corp declined Hanjin Shipping Co.’s request for a cut in charter rates by about 30 percent, dealing a blow to efforts by South Korea’s biggest liner to revamp debt amid a prolonged trade slump, reports Bloomberg.
Hanjin Shipping operates seven container vessels leased from Seaspan. Seaspan recently said there were $11.6 million in charter-hire arrears from Hanjin Shipping.
Gerry Wang, CEO of Seaspan, said: “We do not accept any rate cut. We have never done it. We won’t tolerate a contract re-negotiation. Any call for rate cut is illegal by international laws.”
"We are in continuous discussion and negotiation with Seaspan, and we are putting all our effort (into bringing) the best viable result as soon as possible,” a Hanjin spokesperson said.
Hanjin’s securing of lower charter rates is essential to its survival. It is in talks with shipowners to reduce charter fees as part of a requirement by creditors in exchange for funds to improve its financials.
The Seoul-based company is in talks to lower fees for 60 container and bulk ships it has leased from 22 owners by some 30 percent for a period of about three-and-a-half years, says a regulatory filing.
Hanjin Shipping - the world’s seventh-largest shipping line - currently pays up to 1 trillion won ($849 million) annually for chartering 91 out of the 151 vessels it runs.
The South Korean government is reviewing various measures, including possible mergers, to revive an industry struggling with mounting debt after years of losses from weak demand.
