South Korean Government to Fund Shipbuilding

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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