Hyundai Merchant Marine (HMM) requested the Korea Development Bank (KDB) to support with a total of 9.9 trillion won (US$8.9 billion) in funds until 2022 to grow into the 8th largest global shipping company in the future, Business Korea reported.
HMM had asked consulting firm AT Kearney to estimate how much support funds for HMM would be needed.
AT Kearney calculated that a total of 9.9 trillion won will be needed, including 5.6 trillion won (US$5.0 billion) for large container ships, 3.3 trillion won (US$2.9 billion) for container boxes (2 million won or US$1,800 for each box) and 1 trillion won (US$900 million) for the takeover of overseas terminals.
The report quoted sources saying that there has been no internal decision on the investment amount needed for the medium and long term, including the money for building new vessels and container ships. "In relation with it, we have not made any request to the KDB," it quoted a company source.
The shipping industry says that if the government will support HMM with funds of nearly 10 trillion won after leading the world’s seventh largest shipping company, Hanjin Shipping to go under, it will pose a serious equity issue between the two companies.
HMM posted 833.3 billion won (US$749 million) in operating loss last year. Its operating loss is expected to hit 400 billion won (US$360 million) this year.