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Korea Line Files for Bankruptcy
Tuesday 25 January 2011
Korea Line Corp., South Koreas second-largest operator of dry-bulk ships, filed for receivership after a global oversupply of vessels caused rates to tumble to the lowest in almost two years.
The company, established in 1968, said it had been hit by low freight rates caused by falling trade and a worldwide oversupply of vessels.
With assets estimated at 2.7 trillion won ($2.4 billion), Korea Line provides bulk carrier services to steelmaker POSCO, Korea Electric Power and the state-run Korea Gas Corp.
Korea Line's decision followed failed negotiations with the owners of borrowed vessels on fees.
Local rivals such as Hanjin, Hyundai Merchant Marine and STX Pan Ocean posted operating profits last year, but Korea Line continued to suffer losses.
The Baltic Dry Index, a measure of rates for vessels used to ship iron ore, coal and other commodities, currently hovers below the 1,400-point level, the lowest since February 2009.

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