* Hanjin's failure largest ever among container shippers
* Collapse has disrupted global trade networks
* Hanjin Group chairman "pained" over logistics crisis
(Adds details, quotes, background)
By Joyce Lee
SEOUL, Oct 4 The collapsed Hanjin Shipping Co
Ltd could not compete against global rivals that
were supported by their governments, the chairman of its parent
firm told a South Korean parliamentary hearing on Tuesday.
The world's seventh-largest container shipper sought court
receivership in late August after its creditors led by a state
bank halted further support, stranding $14 billion in cargo and
sending waves through global trade networks.
"Hanjin Shipping lost the game of chicken played among large
shippers," Hanjin Group chairman Cho Yang-ho told the hearing.
"As a private company, we felt the limit of participating in
a dumping war and asked for support, but I failed to convince,"
Cho told lawmakers.
The South Korean government has shown no inclination to
mount a rescue plan for the carrier.
Hanjin Shipping is due to submit a rehabilitation plan to a
Seoul court in December, although many in the industry expect it
to be liquidated in the largest-ever bankruptcy in an industry
battered in recent years by overcapacity and sluggish trade.
Cho said that after Korean Air Lines Co Ltd
acquired a controlling stake in Hanjin Shipping in 2014, the
group injected about 2 trillion won ($1.81 billion) and cut its
debt-to-equity ratio to 800 percent from about 1,400 percent.
"But as foreign shippers that are supported by their
governments by trillions and tens of trillions of won, flooded
the market with low prices, we felt our limit," Cho said.
Cho, 67, did not name any rival shippers. However, carriers
from China and Japan, to France and Germany, have received
various forms of state support in recent years.
Hanjin's smaller South Korean rival, Hyundai Merchant Marine
, is undergoing debt restructuring by its creditor
group led by state-run Korea Development Bank (KDB), the same
lender that halted support for Hanjin.
Hanjin's collapse led ports around the world to deny service
to its ships as vendors refused to unload cargo for fear they
would not be paid, while some ships were seized by creditors,
forcing the group to inject extra money to pay for unloading,
"What pains me the most is that, due to the court
receivership, many ship crews are in the middle of international
waters like orphans, and I am very sorry and pained to have
created a logistics crisis, but we did everything we could," Cho
Hanjin Group had tried to turn the carrier around after its
condition deteriorated under its previous management, he added.
Choi Eun-young became the head of Hanjin Shipping in 2007
after her husband, then-chairman Cho Soo-ho, the brother of the
Hanjin Group chairman, died in 2006.
Choi, who sold control of Hanjin Shipping to Korean Air in
2014, tearfully told lawmakers last month that she had "lacked
expertise" in management as she had "only stayed at home" before
her husband's death.
(Reporting by Joyce Lee; Additional reporting by Keith Wallis
in Singapore; Writing by Tony Munroe; Editing by Clarence