The Hanjin group looks set to lose control of shipbuilder Hanjin Heavy Industries & Construction through its debt restructuring.
The yard company said in a filing on Thursday that it will cut its capital to KRW 72.7bn ($64.7m) from KRW 530.3bn as part of an effort to boost its finances.
After this process in completed in May, its biggest shareholder Hanjin Heavy Industries & Construction Holdings (HHICH) and chairman Cho Nam-ho will no longer own any shares.
It is to seek approval for the move from shareholders in a meeting on 29 March.
The group has been hit by financial problems at its Philippines yard, HHIC-Phil, which filed for court rehabilitation in January after defaulting on $400m of debt.
The Korean parent company's stock was then suspended due to capital erosion.
Earlier this month it agreed a debt restructuring deal for HHIC-Phil, which involves swapping Philippines lenders' debt for equity.
The yard group was at that point in talks with its South Korean lenders on a similar scheme.
Buyer sought
A buyer is still being sought for HHIC-Phil, with potential investors in the US, China and elsewhere interested.
HHICH posted a lower net loss for 2018 of KRW 269.2m, against KRW 159.3bn in 2017.
Revenue was KRW 946bn, compared to KRW 906.72bn.
Operating earnings came in at KRW 27.66bn, from a loss of KRW 61.76bn the year before.
TradeWinds has revealed that Belgian owner Exmar is in talks with other yards about shifting two pioneering VLGC newbuildings it has cancelled at HHIC-Phil.
