August 31 - South Korea's Hanjin Shipping is to file for court receivership after losing the support of its banks.
According to Reuters, banks led by state-run Korea Development Bank (KDB) withdrew backing for the container carrier, saying a funding plan by its parent group was inadequate to tackle the debt, which stood at KRW5.6 trillion (USD5 billion) at the end of 2015.
The Seoul Central District Court will now decide whether Hanjin Shipping should remain as an ongoing concern or be dissolved, reported Reuters.
In a statement, South Korea's Financial Services Commission (FSC) said that Hanjin Shipping's filing for court receivership will have only limited impact on financial markets as the event has been already reflected to a considerable extent in the company's restructuring process.
The FSC added that the South Korean government would promote sales of Hanjin Shipping's core assets - such as ships, overseas sales network and key work forces - to Hyundai Merchant Marine (HMM) in a bid to maintain the "competitiveness of the shipping industry".
HMM's shares were up almost 22 percent, following the news that Hanjin Shipping is to file for bankruptcy
Meanwhile, Hanjin Shipping's receivership is expected to negatively impact the country's shipping and port industries, since the container line took up a significant portion of South Korea's shipping sector.
The FSC statement noted: "The government will exert its utmost effort to minimise damage in those sectors such as delay in freight schedule. In particular, we will encourage the KDB and HMM to arrange additional ships to ensure cargoes are shipped on schedule."