Creditors of Hanjin Shipping Co. won’t extend support for South Korea’s biggest container shipping line as restructuring plans submitted by the company are insufficient to tide over its cash shortage. The plans fall short of requirements by creditors for them to help Hanjin Shipping, its main lender Korea Development Bank said Tuesday. The company may still need 1 trillion won ($893 million) to 1.3 trillion won in cash even after it agreed on charter-rate adjustments with shipowners and extended the maturities of some loans, the state-run lender said. “While Hanjin Group has shown some efforts to turn around, the owner hasn’t shouldered enough responsibility as head of the company,” Lee Dong Geol, Korea Development Bank’s chairman, said at a briefing in Seoul. “The voluntary debt-restructuring program is until Sept. 4 and Hanjin Shipping will probably have to decide whether to file for court receivership.” Hanjin Group will put in all effort to help revive South Korea’s shipping industry even if Hanjin Shipping were to apply for court receivership, the shipping line’s parent group said in an e-mailed statement. “It’s a strong sign that we now see creditors do this,” Espen L. Fjermestad, an analyst at Fearnley Securities AS in Oslo, said by phone. “There have been only a few players making money in the industry in recent years, but many have still been getting financing.” Revival Efforts The creditors’ refusal may deal a blow to revival efforts by Hanjin Shipping— which has been trying to reschedule debt under a voluntary creditor-led program since May—in an industry grappling with a slump in global trade and the slowest pace of economic growth in China in a quarter century. Shipping lines worldwide have been forced to sell assets, cut jobs and idle some operations to bolster their financials as years of overcapacity eroded freight rates. Hyundai Merchant Marine Co., South Korea’s second-biggest shipping line, has already come under creditor control in its own revamp. “It may be something that could be considered later,” KDB’s Lee said, when asked about the possibility of a merger between Hanjin Shipping and Hyundai Merchant. “But we have yet to consider any possibility of a merger since we have just decided to not provide any more support to Hanjin Shipping.” Merger Unlikely Creditors judged that it wasn’t practical to merge the two shipping lines, South Korea’s Financial Services Commission Chairman Yim Jong Yong said in a Yonhap News Agency report. The government has measures in place to sustain competitiveness in the shipping industry in case Hanjin Shipping goes under receivership, he said in the report. Mergers among the nation’s biggest companies in shipping and shipbuilding are inappropriate, the regulator said in April in a statement on steps it would take to help the two industries. Shares of Hanjin Shipping last traded 24 percent lower at 1,240 won, headed for the lowest closing price since December 2009, before they were halted at 1:30 p.m. in Seoul. The stock has plunged 66 percent this year, cutting its market value to 304 billion won. Hyundai Merchant jumped 7.5 percent, the biggest gain in two months, to close at 7,430 won. Hanjin Shipping said Monday that some foreign banks agreed to extend the maturity of its ship-financing debt, which should help ease its cash-shortage problem. It also reached an agreement with shipowners to adjust charter rates on vessels the liner leased, a condition set by creditors as part of the restructuring plan. Dwindling Cash The company, unprofitable in four of the past five years, had total debt of 6.1 trillion won as of June 30, and its cash and equivalents fell to 180.4 billion won from 241.1 billion won at the end of December, according to its first-half report. One of Hanjin Shipping’s vessels was seized in Singapore late Monday, according to a Supreme Court document in the city-state. More of Hanjin Shipping’s vessels could face a similar fate after the creditors’ decision to end support, South Korea’s Edaily said, citing industry officials it didn’t identify. Hyundai Merchant plans to sell convertible bonds to five creditors, including Korea Development and Woori Bank, as part of an earlier announced plan to swap existing debt for shares, it said this month. The convertible bond issue comes after the shipping company completed the sale of 280 million new shares to investors last month as part of the debt-for-equity swap plan. Hanjin Shipping is the world’s seventh-biggest shipping line by capacity and has a market share of 2.9 percent, according to Alphaliner, a maritime consultant. Hyundai Merchant ranks 14th.