A Hanjin Shipping Co ship is seen stranded outside the Port of Long Beach, California. Lucy Nicholson/ Reuters

Hanjin shares tumbled almost 12% on Monday (24 October), after the South Korean shipping giant revealed it would close its business in Europe.

Citing a slump in the demand for its services, the group, whose fleet includes approximately 200 ships, said it would shut its regional headquarters in Germany and close all 10 of its branches in Europe.

However, the group said its UK offices in London, Manchester and Felixstowe will remain open.

A spokeswoman for the Seoul-based company, which remains South Korea's largest container line, said in a statement that Hanjin expects to kick off the winding down process as early as next week after receiving approval from the Seoul Central District Court.

In August, the company, once the world's world's seventh-largest shipping company, filed for bankruptcy in South Korea and the US after losing the support of banks to repay its £5.37bn debts. The company, which last year had about a 4.3% market share on the Asia-Europe trade, has already received bids for its Asian and US operations and is also looking to sell its 54% stake in the Long Beach port container terminal.

"This was very much expected. It is a concentrated effort by the court to sell down the company's remaining valuable assets and garner as much sales proceeds towards debt retrial," said Rahul Kapoor, director at Drewry Financial Research Services.

"The biggest shipping lines will be the biggest gainers because they have the ability to move in much faster. The European lines like Maersk Line have already moved in to increase market share and they will continue to do so."

In the first six months of 2016, Hanjin posted a $473bn (£386bn) loss after tax, as its shipping business was blighted by a slowdown in China and ongoing weakness in global trade.

Last year, sales at the Korean firm tumbled 9.2% year-on-year to 7.74bn Korean won (£5.6bn) and the company posted a pre-tax loss of 209.8bn Korean won.