Hanjin Shipping Files for Court Protection

After Revamp Rejected

SEOUL, Aug. 31 (Bloomberg)
After failed efforts to secure credit and tide over a cash shortage, Hanjin Shipping Co. applied
for court protection on Wednesday. The fall of South Koreas biggest container shipping line has
spurred a rally in the shares of rival Hyundai Merchant Marine Co.
Hanjin Shipping approached the court for protection of its assets after creditors on Tuesday
rejected its restructuring proposal, dealing a blow to the firm thats been trying to reschedule debt
under a voluntary creditor-led program since May. The company is the latest victim of the slump
in global trade following the 2008 financial crisis, coupled with depressed freight rates caused by
overcapacity.
South Koreas Financial Services Commission said that Hyundai Merchant may consider taking
over some of Hanjin Shippings assets, including vessels, network and staff. Shares of Hyundai
Merchant surged 26 percent to 9,330 won, the biggest gain in more than two months.
A court in Seoul will soon decide whether to revive the company after site inspections
Thursday, a spokesman said in a text message. It expects to halt all sale of Hanjin Shippings
assets by the company and its creditors after discussions with executives later on Wednesday, the
court said.
It means one less competitor but it really wont change the fundamental problem the industry is
facing, said Park Moo Hyun, an analyst at Hana Financial Investment Co. in Seoul. There will
still be the same number of ships. What we really need is a way to cut down on capacity.
The restructuring proposals submitted by Hanjin Shipping werent enough to address a cash
shortage, main lender Korea Development Bank said Tuesday.
Hanjin Shipping shares, headed for a fourth year of losses, have tumbled 66 percent this year,
with the market value sliding to 304 billion won ($272 million). Its 5.9 percent June 2017 localcurrency notes fell to a record-low 27.3 percent of face value on Aug. 30, Korea Exchange prices
show.
Hyundai Merchant, the nations second-biggest container line, is itself in the midst of a creditorled debt restructuring program. Unlike Hanjin Shipping, it managed to obtain financial help after
meeting all requirements for funds..

Euro zone inflation stable in August, against

expectations of rise
BRUSSELS, Aug. 31 (Reuters)
Euro zone inflation was stable in August, against expectations of a slight rise, as food, industrial
good and services prices increased by less than in July, piling more pressure on the European
Central Bank to act.
Inflation in the 19 countries sharing the euro was 0.2 percent, the same rate as in July, EU's
statistics agency Eurostat said on Wednesday in its first estimate.
The decline in energy prices was not as steep as a month earlier, but prices of food, industrial
goods and of services rose by less.
The rate was below market expectations from a Reuters poll of 50 economists, which had an
average of a 0.3 percent increase.
Core inflation, which according to the ECB's definition excludes the most volatile components of
unprocessed food and energy, was also unchanged at 0.8 percent, again 0.1 percentage points
below market expectations.
The inflation rate remains far from the ECB's target of just below 2 percent and its failure to rise
is bad news for the central bank which is seeking to prevent a deflationary spiral.
The ECB has been buying 80 billion euros ($89.2 billion)worth of assets a month to pump
money into the economy. Interest rates have been cut below zero and free loans offered to banks.
Its rate-setting Governing Council meets next week, although most investor do not expect further
policy measures until the fourth quarter.
Excluding energy, food, alcohol and tobacco products, the August inflation rate dipped to 0.8
percent.
Energy prices dropped by 5.7 percent year-on-year, compared with 6.7 percent in July.
Prices in food, alcohol and tobacco products went up 1.3 percent, against 1.4 percent in July.
In the services sector, the largest in the euro zone economy, prices were 1.1 percent higher yearon-year, from 1.2 percent in the previous month.