Korea Mulls New Ship Financing Company
Reuters report quoting South Korea government sources that the country is planning to establish a state-backed ship financing company with an initial capital of 1 trillion won ($871.73 million) to help improve the financial health of Korean shipping companies.
The government would provide financing of 6.5 trillion won ($5.67 billion) in total so that local shipping firms could acquire new vessels.
New vessel orders won by South Korean shipbuilders between January-September fell by 87 percent compared to the same period in the previous year.
The government has announced measures to support struggling local shipbuilding and shipping industries following the collapse of Hanjin Shipping Co Ltd, which applied for court receivership in August.
Daewoo Shipbuilding & Marine Engineering Co Ltd, one of the world’s three largest shipyards, all in South Korea, is currently suffering from a big drop in orders.
The trade ministry said Daewoo’s main creditor, state-backed Korea Development Bank (KDB), would take into consideration any future improvement in Daewoo’s operations and market conditions before potentially pursuing a sale or some other form of merger or acquisition of Daewoo.