CAI Expects Overall Exposure To Hanjin Shipping Bankruptcy Is About $2.6 Million

By Ciara LinnaneMarketsMarketWatch Pulse

CAI International Inc. said Friday it expects its overall exposure to the bankruptcy of South Korean shipping company Hanjin Shipping Co. Ltd will be limited to $2.6 million of accounts receivable related to income recognized before the third quarter. The transportation and logistics company said it has about 15,000 containers on lease to Hanjin, equal to $40 million of equipment exposure based on net book value. That's equal to about 2% of the company's rental revenue assets. "Based on our prior experience, we believe that most of our containers will be recovered," CAI said in a statement. "Our units on lease to Hanjin were manufactured for CAI in our color, with our logo and markings, which should assist with recovery and re-leasing efforts." The company said its insolvency insurance, which has a $2 million deductible, covers the value of unreturned containers, damage, recovery costs, and other expenses. Shares were not yet active in premarket trade, but are down 14% in the year so far, while the S&P 500 has gained about 7%.

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