CHO YANG OUTLINES TIMETABLE FOR FINANCIAL RESTRUCTURING
Cho Yang Shipping Co., Ltd., the cash-strapped Korean shipping line, has outlined a timetable for its financial restructuring, saying that it needs the cooperation of creditors and other interested parties to avoid liquidation.
Cho Yang filed a petition for reorganization proceedings with a Korean court on May 29, designed to overcome liquidity problems and negotiate new repayment arrangements with creditors.
The Korean company issued a report on Monday that outlines the schedule of these proceedings. Following a first meeting with creditors to assess secured and unsecured claims, Cho Yang expects a draft reorganization to be written by the end of August or September. The reorganization plan would then be submitted for acceptance in about November, six months after the court petition of May 29.
The company mentioned a timetable for repayment of overseas claims “on per capital basis” by 2003.
Cho Yang said that it can also raise more than $23 million by selling its real estate assets and its affiliated company, Dongseoul Country Club.
The shipping company also pleaded for customers to immediately pay unpaid freight charges. “We are in desperate needs of working capital and your soonest action to settle such freight charges would be greatly appreciated,” it said.
The company statement does not mention the total amount of its outstanding debts.
“The most important emphasis should be made on the prerequisite that we need to seek for and earn generous understanding and cooperation on this issue not only from our customers, but also from all interested parties,” Cho Yang said in the statement. Without cooperation, “it is quite clear and undisputable that we cannot avoid going bankrupt and it will result in our loss of opportunities to revive and all interested (parties’) loss of opportunities to collect claims and other rights,” it warned.
Cho Yang added that its future business plan is to operate three intra-Asia container services, several Asia/Europe or Asia/Mediterranean services and one transpacific weekly service.
The transpacific operation, scheduled to start next January, would employ six vessels of 1,800-TEU capacity. Cho Yang would provide three of the six vessels and an unknown partner would provide the balance. Last month, Cho Yang was forced to withdraw from its partnership with Hanjin Shipping and Senator Lines in the United Alliance. Cho Yang has also redelivered chartered vessels that were used in United Alliance services.