South Korea’s leading shipping company Hanjin Shipping is expected to apply for a creditor-led restructuring program on Monday.

Hanjin Group, the parent group of Hanjin Shipping, said earlier in the day that a creditor-led restructuring program was inevitable due to a liquidity crunch caused by worsening market conditions in the shipping sector.

The restructuring program is expected to begin as early as next month after the shipping company finalizes the details with its creditors.

The report comes in the wake of Finance Minister Yoo Il-ho's comments vowing to deny further credit to struggling firms that refused to cut costs and increase liquidity by restructuring themselves. 

After a closed-door meeting among government officials, Yoo added that the government would work to support those who are cut from their jobs during the restructuring process to find new jobs.

The government will announce restructuring plans for the shipping, shipbuilding, construction, steel and petrochemical sectors on Tuesday.