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Hanjin says container arrests not due to financial status

Hanjin says container arrests not due to financial status

Seoul: Hanjin Shipping says arrest of 5,900 of its containers Sumitomo Mitsui Banking Corporation (SMBC) is a commercial dispute and does not relate to the company's financial status. SMBC filed in the US earlier this week to seize 5,900 containers leased to Hanjin by Unitas. Hanjin Shipping said it leased the containers from Unitas for eight years from 2001 to 2009, with a balloon payment at the end of the contract as part of the 32nd installment to purchase the boxes. SMBC financed the production of the containers for Unitas given the mortgage rights. "However, when Hanjin Shipping intended to make the balloon payment upon the 32nd installment, Unitas argued that the balloon payment was only part of the lease payment and that they were not obliged to give the ownership to Hanjin Shipping," the South Korean company said. "Unitas argued that if Hanjin Shipping wanted to purchase the containers, Hanjin Shipping needed to pay the balloon payment once more, which is against contract." The payment between SMBC and Unitas was defaulted leading to the bank seizing the containers. "This matter has nothing to do with Hanjin Shipping's financial status; it is a contractual dispute between Hanjin Shipping, Unitas and SMBC," Hanjin Shipping said. [10/06/10]

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