Cautious Optimism at Halla Shipyard

In Ernest Hemingway’s 1926 novel The Sun Also Rises, Jake Barnes asks his friend Mike, a Scottish aristocrat, how he had managed to lose his fortune. “Two ways,” Mike says, ” first gradually, then suddenly.” While Hemingway may not have been a shipping man, based on the foregoing, he would probably argue that Halla’s bankruptcy was a long time coming. He would not be wrong.

Suddenly
Let us first look at how Halla “suddenly” went bankrupt. Like its mother country, which showed economic health until the eve of bedlam, Halla Engineering & Heavy Industry Co., Korea’s 12th largest chaebol, was enjoying success up until the very moment that it began to hemorrhage money. In fact, only weeks before Halla moved 5 of its 18 subsidiaries (including the Samho Yard) into receivership, that company was touting its $104 million contract to build two crude oil tankers for Jahre Dahl Bergesen (bringing total orders for 1997 over $1 billion) and the fact that the yard had a backlog of 44 ships with an aggregate of 2.3 million grts.

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