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

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%.