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State-backed ship financing firm to be launched this month

All News 09:45 January 06, 2017

SEOUL, Jan. 6 (Yonhap) -- A state-backed ship financing firm will be established this month with initial capital of 1 trillion won (US$845 million) to help jack up the financial status of local shipping firms, a ministry said Friday.

Under the plan, the firm will be given a total of 6.5 trillion won to help local shipping firms buy new vessels, the Ministry of Oceans and Fisheries said in its policy report to Acting President and Prime Minister Hwang Kyo-ahn.

The measures aim to support local shipping firms, as well as shipbuilders, struggling with falling new orders and mounting losses.

Last year, the government has vowed to support the local shipping industry as Hanjin Shipping Co., the country's No. 1 shipping firm, was put under court receivership in September with heavy debts.

Daewoo Shipbuilding & Marine Engineering Co. and other local shipyards have been suffering from a sharp drop in new orders, massive losses stemming from a delay in the construction of offshore facilities and increased costs.

The state-backed firm, tentatively named "Korea Shipping Co.," is tasked with taking over container ships from ailing shipping companies and leasing them back to the shippers to help such companies stay afloat.

The government also plans to create a 1.9 trillion-won fund for the local shipbuilders to help win more orders.

Meanwhile, the ministry said a total of 3.7 trillion will be spent this year to develop and maintain seaports.

State-backed ship financing firm to be launched this month - 1


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