CHO YANG FILES FOR BANKRUPTCY

CHO YANG FILES FOR BANKRUPTCY    Cho Yang Shipping Co., Ltd., one of the Korea’s main container shipping lines, has filed an application for bankruptcy proceedings with a court in South Korea.
   The troubled Asian carrier filed for court receivership, together with one of its affiliates, Nam Buk Fisheries Co., Ltd.
   Cho Yang said that the court receivership, called “reorganization proceedings,” involves handing over the administration of its business to a receiver appointed by the court.
   Earlier this year, Cho Yang has had several vessels detained in port. It was also forced to cut back most of its international container shipping operations, pulled out of the United Alliance and revamped its management.
   Samik Logistics Co., Ltd., a logistics subsidiary of Cho Yang, has filed an application for a different form of court receivership, known as “composition proceedings.” In Korea, the composition proceedings mean that a company’s assets and debts are frozen, but its owners can continue to manage the company.
   Cho Yang, owned by the Park family in South Korea, was set up in 1961. It took on increasing amounts of debt after launching a round-the-world service in 1991 with Senator Lines and Deutsche Seereederei and after the financial and currency squeeze caused by the Asian crisis of 1997.
   Cho Yang said that, to cope with these adverse circumstances, it sold 70 percent of its assets to restructure itself.
   “However, with no further funds supply from banks due to constricted money market in Korea and with all proceeds from sales employed for debt redemption, the company has been continuously afflicted with shortage of operating funds,” Cho Yang said in a statement.
   Cho Yang hopes to come out of bankruptcy proceedings. “There seems to be no strong evidence at present to argue the companies’ belief that the company will soon survive when this temporary cash squeeze problem is settled,” the company claimed in a statement.
   Meanwhile, sources close to Cho Yang confirmed that the carrier is ending its involvement in the United Alliance’s Asia/Europe and Asia/Mediterranean/U.S. East Coast container services.