Korea Eximbank News

As part of the government's large-scale rescue plan for shipping sector, the Export-Import Bank of Korea  (Korea Eximbank) sets a figure for loans and guarantees to the country's shipping sector. According to Yonhap, Korea Eximbank will funnel more than 800 billion won ($749.3 million) in shipping finance as a part of the state-sponsored program to revive the shipping industry following the collapse of Korea’s flag sea carrier Hanjin Shipping. The five-year plan for rehabilitating the maritime sector involves the building of more than 200 ships, including 140 bulk carriers and 60 container ships. The report quoted Eun Sung-soo, Korea Eximbank chairman and president saying that the fund will be given in the forms of loans and guarantees that the shippers can use to purchase new vessels…

The South Korean government decided to restructure two financially-troubled mid-sized shipbuilders, said a report in Business Korea. While filing for court receivership for the debt-ridden Sungdong Shipbuilding, the government has decided to save STX Offshore and Shipbuilding Co. on condition of slashing 75 percent of its production workforce. The two shipbuilders are heavily indebted to Korea's two state-run banks, as they have struggled with snowballing losses amid unfavorable oil prices and the worldwide industry downturn. According to the report, the government held a ministerial meeting to discuss ways to strengthen the industrial competitiveness and announce its restructuring plans for mid-size shipbuilders.

The government of South Korea has decided to help Hyundai Merchant Marine (HMM), the nation’s only major shipping line, grow into a mega shipper by all means available, reports Business Korea. The state plans to provide loans of up to 6.5 trillion won (US$5.68 billion) to domestic shipping firms, including HMM, so that they can grow in size and survive in the global chicken game. The government has  announced plans to raise the competitiveness of the shipbuilding and shipping industries. The plans were focused on enlarging HMM, which is actually the only one global shipping company from the nation, in order to boost its competitiveness in the global market.

Beleaguered South Korean  shipbuilders's total liabilities as of the end of last year for their 34 overseas affiliated companies have reached 5.3584 trillion won (US$4.65 billion), up 28.7% compared to five years ago, reports BusinessKorea. The debts of those of Daewoo Shipbuilding & Marine Engineering increased by 43.2% to 2.1842 trillion won (US$1.89 billion) during the period while the amount of those of Samsung Heavy Industries soared from 431.2 billion won (US$374.9 million) to 1.2633 trillion won (US$1.09 billion). The amount was 1.9109 trillion won (US$1.66 billion) for Hyundai Heavy Industries’ although they reduced theirs by 13.4% over the five years.

Struggling with technology and a plunge in oil prices that has discouraged exploration, Korean vessel makers are racking up debt and could show billions of dollars in losses, reports Bloomberg. The Big Three shipbuilders in South Korea ventured into offshore oil rigs starting around 2010 with a goal to avoid direct competition with China. The idea appeared excellent then, with oil prices climbing toward $100 a barrel. Today the strategy seems to have backfired. The deep-ocean strategy is coming back to bite Korean shipyards. The Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries  “excessively competed to win offshore plants to make up the gap caused by falling demand for ships…