Hanjin’s board unanimously voted to file for receivership on Wednesday morning Bloomberg reported quoting a spokesman for the shipping company.
Cash-strapped Hanjin’s credit led rehabilitation scheme is due to expire on 4 September.
On Tuesday Hanjin's main lender Korean Development Bank withdrew its support and Nikkei reported that chairman Lee Dong-Gul likened any further assistance to pouring water into a broken jar, at a press conference. The company had debts of approximately KRW5.6trn ($5bn).
The bankruptcy of Hanjin is the biggest ever in the container shipping sector according analyst Alphaliner, and the world’s seventh largest line with 98 vessels totaling 609,500 teu. The company also operates a fleet of 44 bulkers and tankers.
Hanjin had been trying to renegotiate charter rates for some of its chartered in containerships. The company charters 61 vessels from various international owners including Seaspan, Danaos, Conti Reederei, Ciner, KMarin, Rickmers and Pacific International Lines, Alphaliner said.
Some such as Seaspan had been vocal in saying they would not agree to charter rate cuts.
Hanjin now faces ship arrests and vessels being barred from entering port. Singapore courts list the 1998-built Hanjin Rome as being arrested 28 August and the Hanjin Sooho is reported to have been detained in Shanghai.
Meanwhile Reuters reported on Wednesday that Hanjin vessels had been barred from entering the ports of Xiamen and Xingang in China; Valencia in Spain; Savannah in the US, and Prince Rupert in Canada.