Asia/Pacific News
South Korea to Launch $1.2 Billion Fund for Shipping
The South Korean government has plans to develop a $1.2 billion investment fund intended to provide support to the country's shipping industry, according to local media reports.
The fund is said to be intended to not only bring more stability to the struggling sector, but also to encourage ship owner investment into new vessels.
Local commercial banks and state-run financial institutions, including the Korea Development Bank, Export-Import Bank of Korea, and Korea Trade Insurance Corporation, will be leading the fund it is reported.
The fund is said to be set to receive 50 percent of the required finances through senior bonds from commercial banks, 40 percent from state-run financial institutions' subordinated bonds, and the remaining 10 percent will be provided by shipping companies.
In order to mitigate financial risk stemming from new investments, the Korea Trade Insurance Corporation and the Korea Maritime Guarantee Insurance Co., Ltd. will provide financial security to the companies looking to buy or sell vessels under the plan.
In November, Ship & Bunker reported that the South Korean government was downplaying claims that it was looking to force a merger between Hyundai Merchant Marine Co. and Hanjin Shipping Co.
