Executive Briefings

South Korean Government to Fund Shipbuilding

South Korea's finance minister has announced the government plans to support orders of 250 or more vessels by 2020 to help local shipbuilders. The government plans to establish a state-backed ship financing company with an initial capital of 1 trillion won ($871.73m) to help improve the financial health of Korean shipping companies.

The government would provide financing of 6.5 trillion won ($5.67bn) in total so that local shipping firms could acquire new vessels, according to a statement. The measures were announced to support struggling local shipbuilding and shipping industries following the collapse of Hanjin Shipping Co Ltd, which applied for court receivership in August.

Daewoo Shipbuilding & Marine Engineering (DSME), one of the world's three largest shipyards, all in South Korea, is currently suffering from a big drop in orders.

The trade ministry said DSME's main creditor, state-backed Korea Development Bank (KDB), would take into consideration any future improvement in DSME's operations and market conditions before potentially pursuing a sale or some other form of merger or acquisition of Daewoo. As of now, there is no plan to sell DSME, a financial regulator clarified in a press briefing.

New vessel orders won by South Korean shipbuilders between January and September fell by 87 percent compared to the same period in the previous year — steeper than a 72 percent drop in global orders, the trade ministry said.

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The government would provide financing of 6.5 trillion won ($5.67bn) in total so that local shipping firms could acquire new vessels, according to a statement. The measures were announced to support struggling local shipbuilding and shipping industries following the collapse of Hanjin Shipping Co Ltd, which applied for court receivership in August.

Daewoo Shipbuilding & Marine Engineering (DSME), one of the world's three largest shipyards, all in South Korea, is currently suffering from a big drop in orders.

The trade ministry said DSME's main creditor, state-backed Korea Development Bank (KDB), would take into consideration any future improvement in DSME's operations and market conditions before potentially pursuing a sale or some other form of merger or acquisition of Daewoo. As of now, there is no plan to sell DSME, a financial regulator clarified in a press briefing.

New vessel orders won by South Korean shipbuilders between January and September fell by 87 percent compared to the same period in the previous year — steeper than a 72 percent drop in global orders, the trade ministry said.

Read Full Article