Korea Shipping to Buy Up to 10 HMM Vessels
The state-backed ship financing company Korea Shipping is looking to buy up to ten container vessels operated by Hyundai Merchant Marine (HMM), and lease them back to the shipping firm, says a report in Yonhap.
“Korea Shipping will provide some 720 billion won (USD 633.7 million) to Hyundai Merchant this month or next month to shore up its capital base,” the report quoted Sohn Byung-doo, a standing member of the Financial Services Commission, the country’s financial regulator, as saying.
Funds will be transferred to HMM through the purchase of stocks and debts. About KRW150 billion will be set aside to buy HMM stock, with the remaining funds used to buy debts and convert these into stocks.
Korea Shipping Co. was established this month with an initial capital of 1 trillion won (US$878 million) to help local shipping lines buy new vessels.
The measures aim to support local shipping firms, as well as shipbuilders, struggling with falling new orders and mounting losses.
The move comes on the back of the prolonged shipping woes experienced during 2016, which culminated in the bankruptcy of the South Korean container carrier Hanjin Shipping in late August.
Separately, Hyundai Merchant will place orders for five container vessels and two or three oil tankers later this year with the state-backed financing program.