Monday 24 October 2016 10:32 am

Hanjin Shipping’s share price dives as shipping giant announces closure of European business

Shares in South Korean freight giant Hanjin Shipping have dived almost 12 per cent this morning after the company announced it plans to shut its European business. 

A court in Seoul overseeing the company's receivership process today approved Hanjin winding down four of its European units, including Hanjin Shipping Europe and Hanjin Shipping Poland. The company expects to start the closure process in Europe this week. 

The embattled firm plans to close 10 of its offices on the continent, including Spain, Hungary, France, Holland and Belgium, as well as its regional headquarters in Germany. Its UK offices in London, Felixstowe and Manchester will stay open. 

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Hanjin's stock was trading down 11.8 per cent to 1,005 won this morning. 

In August, Hanjin filed for receivership after creditors refused a restructuring plan for its six trillion won (£4.4bn) debt. 

Read more: Shippers call for EU to stop interfering with global regulations and to focus on the single market

Earlier this month, a court filing said Hanjin had received legal approval to seek buyers for its assets in order to pay back creditors which are lining up claims. It will receive letters of intent by 28 October. 

The group's collapse has resulted in billions of pounds worth of cargo being effectively stranded at sea and been likened to the Lehman credit freeze in terms of its effect on the industry.