TROUBLED Hyundai Merchant Marine (HMM) has said it had reached agreements with shipowners to secure lower charter rates, an achievement considered a breakthrough in its restructuring that enables state support for the purchase of mega-ships by reducing the Korean company's debt load, reports IHS Media.

Shipowners Danaos Corporation, Eastern Pacific Shipping, Zodiac Maritime Agencies, Navios Maritime and Capital Ship Management Corporation, which have leased container ships to HMM, have agreed to reduce charter rates by 20 per cent, while bulk carrier owners gave a 25 per cent discount.

The purchase of mega-ships is expected to reduce slot costs, boosting its competitiveness in major east-west trades, and help win memberships in THE Alliance, a new major vessel-sharing agreement linking Hanjin, Hapag-Lloyd, "K" Line, MOL, NYK and Yang Ming. 

The deal provides HMM customers some relief as well since there was speculation on whether or not the carrier would stay afloat given its high debt load amid a weak freight market and industry-wide overcapacity.

"KDB [Korea Development Bank] will take all necessary measures to make HMM a competitive global shipping company through reshuffling its organisation structure and inviting outside experts to consult on restructuring the fleet by ordering highly efficient mega-container ships to boost HMM's mid-term competitiveness," said the bank, which will become the company's largest shareholder after its restructuring is complete.

Of the 124 ships HMM operates, 85 are chartered.