The South Korean largest shipping company, Hanjin Shipping Co. announced that it would close operations in eight of its ten offices.
According to a company spokesperson, Seoul Central District Court approved the decision of closing European offices, including its regional headquarters in Germany. The two remaining offices will be also closed eventually.
“The profitability of our European business has fallen a lot so we are seeking court approval to shut it down,” said Hanjin.
Early this month, the Korean company has also decided to sell its Asia-U.S operations and the bids are expected by Friday. The court expects to get a deal by mid- November. Hanjin is selling five containerships and its stakes in terminals around the world.
“This was very much expected. It is a concentrated effort by the court to sell down the company’s remaining valuable assets and garner as much sales proceeds towards debt retrial,” said Rahul Kapoor, director at Drewry Financial Research Services.
The shares of Hanjin Shipping fell 12 percent on Monday and still has a debt of about $5.4 Billion.
Of the 97 container vessels Hanjin operated, unloading of cargo from 80 ships have been completed as of Oct. 23, according to Hanjin’s website.