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Danaos left vulnerable after South Korean meltdown

Nearly half of Danaos Corporation's total revenues come from contracts tied to the two crisis-stricken South Korean carriers Hyundai and Hanjin. The Greek shipowners' stocks have plunged in recent months.

Photo: Hyundai Merchant Marine

Greek listed Danaos Corporation, one of the world's ten largest shipowners and charterers of container ships, looks to be highly exposed to the crisis at South Korean shipping conglomerate Hyundai Merchant Marine (HMM). The company also seems to be similarly exposed to another struggling South Korean carrier, Hanjin Shipping, according to the Greek shipowners' 2015 annual report.

On the New York stock exchange, Danaos Corporation's share price has plummeted by more than 36 percent in the past three months alone. In the same period, the scope of the crisis at Hyundai Merchant Marine and the consequences of the group's debt situation became clear for real. Especially after the group's management penned a letter February 1st of this year to all its business partners, threatening to go into receivership unless both the container carriers and bulk carriers with which it had entered into chartered agreements were willing to enter new and considerably reduced charter contracts.

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