Debt Looms for South Korean Shipyards
The top four Korean shipbuilders have 2.3 trillion won ($1.9 billion) in notes maturing next year, the most in Bloomberg-compiled data going back to 1997. Bloomberg reports that some of them may have trouble paying debts without help from the government or group firms, according to HMC Investment Securities Co. and NH Investment & Securities Co. Hanjin Shipping Co. sought bankruptcy protection this year and earnings suffered at Korea’s top shipyards including Hyundai Heavy Industries Co. and Hyundai Mipo Dockyard Co., amid a slump in oil prices and growing competition from China. On October 31 this year, Korea’s Ministry of Strategy and Finance (MOSF) announced a plan to buttress the shipping and shipbuilding industries.
Hanjin Shipping, Hyundai Merchant Merger Talks in Air
A report in WSJ says that Hanjin Shipping Co has applied for a creditor-led debt restructuring to avoid bankruptcy, reviving talk of a possible merger with rival Hyundai Merchant Marine Co. (HMM). It could be merged as a part of the government-led restructuring of ailing industries and companies, according to government sources. Both Hanjin Shipping Co. and Hyundai Merchant Marine Co. (HMM) are in hot water, but they are different from each other in a debt structure. Unlike HMM, Hanjin Shipping has a lot of non-bank debt, which makes it difficult for the main creditor Korea Development Bank (KDB) and other creditor banks to manage the company under a creditor-led restructuring program.
Korea: No.1 in Global Shipbuilding
Korea's shipbuilding industry is on a roll as it secured the top spot in the global market in the first quarter of this year. The Ministry of Strategy and Finance said that Korea accounted for over 40 percent of the market, followed by China at 34 percent and Japan with just 4 percent, according to a report on http://english.chosun.com
