Troubled South Korean shipping company Daebo International Shipping’s worth as a continuing enterprise exceeded its liquidation value by KRW29 billion (USD25.9 million).
During a hearing on 30 June, Hong Soon-Ho, director of accounting firm Deloitte Anjin, which has been appointed to assess Daebo’s assets and liabilities, told the Seoul Central District Court that Daebo’s worth as a continuing enterprise was KRW47.6 billion. Hong calculated that Daebo’s liquidation value is KRW18.6 billion.
Daebo filed for rehabilitation on 23 February, which was followed by a Chapter 15 filing in the United States during March.
Daebo currently has KRW1.9 billion in cash and 34 employees. The company’s total assets are worth KRW200.7 billion while it has total debts of KRW307.7 billion.
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Although Daebo’s debts exceed its assets by KRW107 billion, Deloitte Anjin pointed out that it has long-term shipping contracts with reliable clients.
Deloitte Anjin stated that among the long-term contracts of affreightment Daebo has, two are with Korea South-East Power Company, one is with Korea Midland Power Company, one is with Korea Western Power Company, and two are with compatriot steel mill POSCO.
Daebo, which operates five bulkers, two general cargo ships, and two passenger ships, plans to sell or charter out two of its ships this year. It has also chartered in 15 other bulkers. Six of the company’s controlled bulkers are dedicated to the long-term shipping contracts.
Daebo ran into financial trouble after being ordered to pay USD1.5 million following a suit brought by Indonesian coal company PT Jawon Abadi, which chartered Daebo’s ships to ship coal to China.
Its woes deepened when the Baltic Dry Index fell to a historic low in February.
After hearing Deloitte Anjin’s submissions, Judge Lee Jae-hee gave Daebo up to 14 August to submit details of its shareholders, stock holdings, and other information to support its case for restructuring.
This post was sourced from IHS Maritime 360: View the original article here.