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Samho Shipping files for court receivership
Thursday, April 28, 2011, 09:13:48 Paul Yoon ckyoon7@paran.com
Korea shipping industries are shocked again that Samho Shipping Co., Ltd. (Samho), medium-sized (MS) ship owners, filed with Busan District Court for court protection on Apr. 21. The shock to Korea shipping industries is intensified that merely three months after Korea Line’s filing on Jan. 25 this year for court receivership Samho known as MS tanker player for its relatively solid operation has filed for the court protection.

Samho filed for company rehabilitation procedures together with application for relief restraining order and for company asset protection and disposal. The rehabilitation procedure commencement has yet to be ruled by the court at this coming weekend, normally taking a week for the court to judge whether going ahead with it or not.

Samho was said to have experienced considerable difficulties in business last year, ranked 20th among Korean shipping firms, posting KW 196.7 billion (bil.) in annual sales, KW 43.2 bil. in operation loss and KW 65.2 bil. in net loss for last year. Notably, Samho had tried its best to normalize its operation relying on the sales and lease-back of its two chemical tankers under Korea Development Bank’s “Lets Together Shipping Fund.” Yet the shipping firm was unable to overcome difficulties and opted for the court protection, the Maritime Press was told.

Among the major factors that contributed to Samho’s option taken to file for the court receivership, the first one is that the tanker market for its main business has recorded the worst slowdown last year and that it is still going on without any improvement this year. As of the end of last year, Samho owned a fleet of 21 product carriers amounting to 257,419-dwt, excluding one bulker and two VLCCs. Under the on-going poor tanker market situation carried over from last year, Korean flag carriers like SK Shipping, Daelim Corp, Heung-A Shipping and others have suffered considerable difficulties in tanker business thus far.

Samho Shipping’s liquidity problem has got worse with its financial commitment to Samho Shipbuilding, its associate, overburdened due to its payment guarantees issued beyond its capacity together with its large amount of newbuilding orders placed at its associated shipyard. Samho Shipping has underwritten Samho Shipbuilding’s debt of KW 337.912 bil. representing 53.5% of its total asset, while recording KW 65.2 bil. in net deficit for last year.

To make the matter worse, the hijacked M/V Samho Dream and M/V Samho Jewelry by the pirates last year on top of the on-going market slump hit the company hard leading to big loss unexpectedly and to the last decision for the court receivership.

The court receivership just filed by Samho Shipping adds up to a total of seven Korean shipping lines that have filed for court protection so far since the start of shipping crisis in 2008, including Samsun Logistics, Daewoo Logistics, TPC Korea, Serim Ocean Shipping, Bongshin Co., and Korea Line.
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