Finance Minister Yoo Il-ho has warned that local shipping company Hyundai Merchant Marine will face court receivership if it fails to reach an agreement over rental fees for ships.

The minister issued the warning on Thursday, urging the flagship company of Hyundai Group to find common ground with ship owners to cut freight rates on chartered fleets.

Yoo said that if the negotiations fall through, the government cannot help but push for court receivership, stressing that it will not provide further liquidity support for the ailing company.

Hyundai Merchant Marine, the nation's second-largest shipping line, has been selling its non-core assets and properties to secure cash as part of a self-rescue program but reeling under mounting debts amid a global economic slowdown. 

Last week, the finance minister vowed to restructure South Korea's shipping companies and specifically referred to Hyundai Merchant as his most serious concern.