The head of South Korea’s financial watchdog on Wednesday said Hanjin Shipping should prepare for receivership if it can’t reach an agreement with creditors and tonnage providers, signaling the government is unlikely to bail out the country’s largest container line.

“Overall, Hanjin Shipping is implementing debt restructuring on three fronts (charterhire costs, bank loans and bonds),” said Yim Jong-yong of South Korea’s Financial Services Commission at a press conference. “However, should there be a lack of liquidity and the company fails to implement its business normalization, it will be dealt with according to principle.”

The Korea Development Bank, which is Hanjin’s largest creditor and has assumed management control of the beleaguered liner, has faced criticism for its use of taxpayer dollars to finance South Korea’s struggling shipping lines and shipbuilders. Hanjin last week got a reprieve from creditors, who granted a month-long extension to the line to lower charter rates, reduce loans from foreign lenders and reschedule bond payments.

The company has not said much publicly about the status of its efforts to secure lower charter rates. “We’re still in talks with the tonnage providers and we’re diligently carrying on the discussions,” a Hanjin spokesperson said in response to a question on the matter.

The company charters 91 vessels from 23 tonnage providers, including Seaspan, Danaos Corporation, and Ciner Ship Management. Seaspan has publicly stated that it is against lowering charter rates.

The container line is also in talks to reschedule $130 million in debt due in 2017 and plans to sell assets valued at $400 million.

The South Korean media has reported that the Hanjin Group via Korean Air Lines will pump 700 billion South Korean won ($610.3 million) into Hanjin Shipping, but that has not been officially confirmed.

Hanjin could need 1.2 trillion South Korean won over the next two years without more funding, the financial watchdog has said.

The press conference also revealed that South Korea’s second-largest shipping line, Hyundai Merchant Marine, is making progress on the next phase of its normalization efforts following its successful efforts to reduce payments to shipowners and bond holders in a debt-for-equity swap.

“With a new CEO taking over control in due course, HMM can strengthen its competitiveness by securing more long-term shipping contracts,” said Yim.