Jinhui reveals $5m of exposure to Korea Line

Jinhui Shipping and Transportation has on Tuesday unveiled that it has more than $5m of exposure to bankrupt firm Korea Line Corporation (KLC), Seatrade Asia online reports. The Hong Kong-listed shipping firm has made a provision of $2.8m for loss of charter hire, plus a provision of $2.226m for impairment loss. Jinhui has a chartered-in capesize chartered to KLC under a five-year time-charter with expiry in 2014, but KLC filed for protective receivership in February this year and has ceased payment of the charter hire. KLC submitted a notice of termination of time-charter contract to Jinhui in March, prompting Jinhui to file a claim against KLC. “As the expected economic benefits that derived from the spot voyage charter contract is less than the unavoidable costs under a long term chartered-in contract, provision for loss on charter hire of $2.8m was recognised in current quarter and included in shipping related expenses,” Jinhui said. Jinhui has also provided an impairment loss of $2.226m on trade receivables due from KLC. The Chinese firm added that the outcome of the KLC receivership remains “unclear due to the lack of transparency and ambiguous handling of the situation by the Korean courts.”