SOUTH Korea's economy could lose US$19.13 billion, including up to $1.12 billion at the port of Busan, and 5,400 jobs in the event that the nation's two leading shipping lines, Hanjin Shipping and Hyundai Merchant Marine (HMM) file for bankruptcy, according to estimates contained in a report by the Korea Shipowners' Association.

In response to concerns such as these, founder and chief executive of containership lessor Seaspan Gerry Wang, urged the South Korean government to do more to help its struggling shipping sector in an interview with maritime news outlet Splash.

To regain profitability in a difficult market, Hanjin Shipping and HMM have been seeking to restructure debts and cut charter rates for months. HMM reached an agreement with shipowners earlier this month on a 20 per cent rate reduction for chartered containerships, reported American Shipper.

But Hanjin has failed to secure the 30 per cent reduction in charter rates demanded by its creditors, meaning it could face court receivership if it is unable to come to terms with shipowners as the charter rate reduction is seen as a crucial first step in its restructuring.

"I hope the Korean government is fully aware that this is not just a Hanjin Shipping issue ?it is concerning their shipbuilding industry, their exports, their national shipping lines, their reputation as law-abiding OECD country," said Mr Wang. "If I were the Korean government I would stand firm behind Hanjin Shipping right away."

Mr Wang told Bloomberg that Seaspan would not accept any rate cuts for the seven container vessels leased by Hanjin, even going as far as to call the contract renegotiation illegal.

"Hanjin Shipping, without a liquidity injection from controlling shareholder, the Cho family and the Korea Development Bank, will have a very challenging road ahead," he said.

Asked about Seaspan's plans, Mr Wang said the firm is aiming to build its own liquidity to make strategic acquisitions as assets may be sold below market value during the current down market for the shipping industry.