9/8/16

Samsung Says $38 Million of Goods On Board Two Hanjin Vessels

In court filing, Samsung supported Hanjin bankruptcy petition
Costs to escalate if cargo remains unloaded, Samsung says

Samsung Electronics Co., the world’s biggest smartphone maker, said about $38 million of its goods and parts were on board two vessels operated by the distressed Hanjin Shipping Co., which applied for bankruptcy protection last week.
Supporting Hanjin’s Chapter 15 U.S. Bankruptcy Court petition, Samsung said in a court filing Tuesday that without an order protecting the shipping line against creditors, the vessels won’t be able to dock, causing the South Korean electronics maker losses that may “continue to escalate so long as the cargo aboard these ships remains unloaded.”
Hanjin Shipping won a provisional ruling Tuesday, protecting its assets in the U.S. against creditors, while the shipping line proceeds with its reorganization in South Korea.
The collapse of Hanjin Shipping, South Korea’s biggest container shipping line, has sparked concerns the vessels won’t be able to pay docking fees and handling charges or their cargo might be seized by creditors, prompting many ports in the U.S., Asia and Europe to turn them away. As many as 85 Hanjin ships are stranded around 50 ports in 26 countries, according to the company.
Great Costs
Samsung said its visual display business division had $24.4 million of parts and finished goods in 304 containers meant for its factory in Mexico, while its home appliance business division had products such as refrigerators, washing machines, dishwashers and microwave ovens worth $13.5 million in 312 containers.
If the cargo can’t be unloaded immediately, Samsung will be forced to transport alternative parts by air to help meet contractual obligations, entailing “great costs,” it said. For instance, it would have to charter at least 16 planes at a cost of $8.8 million to transport 1,469 tons of goods, it said.
“All these costs and delays will be a loss not only to Samsung, but also to major retailers in the U.S. and, ultimately, to U.S. consumers,” Samsung said in the filing. “It is vital to Samsung’s and U.S. retailers’ interests to avoid major disruptions in production,” particularly ahead of the holiday shopping season, it said.
When reached for comments, Samsung said it is taking measures to minimize any impact on its business, without elaborating.
U.S. Bankruptcy Court Judge John K. Sherwood in Newark, New Jersey, issued an interim provisional order Tuesday on Hanjin’s request and asked for lawyers in the case to file more information before a final hearing Friday, according to minutes posted on the court’s website.
“There are innumerable parties that can arrest and levy on the debtor’s property in the United States,” the company said in its Sept. 2 request. “These parties include, but are not limited to, fuel provider, ship owners (where the debtor is a charterer), terminals, port pilots, trucking companies, repair vendors, rail companies, and container lessors.”

http://www.bloomberg.com/

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