Korea Shipping to Buy Up to 10 HMM Vessels

Photo: Hyundai Merchant Marine

By Aiswarya Lakshmi

The state-backed ship financing company Korea
Shipping is looking to buy up to ten container vessels operated
by Hyundai Merchant Marine (HMM), and lease them back to the
shipping firm, says a report in Yonhap.

"Korea Shipping will provide some 720 billion won (USD 633.7
million) to Hyundai Merchant this month or next month to shore
up its capital base," the report quoted Sohn Byung-doo, a
standing member of the Financial Services Commission, the
country's financial regulator, as saying.

Funds will be transferred to HMM through the purchase of stocks
and debts. About KRW150 billion will be set aside to buy HMM
stock, with the remaining funds used to buy debts and convert
these into stocks.

Korea Shipping Co. was established this month with an initial
capital of 1 trillion won (US$878 million) to help local shipping
lines buy new vessels.

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

The move comes on the back of the prolonged shipping woes
experienced during 2016, which culminated in the bankruptcy of
the South Korean container carrier Hanjin Shipping in late

Separately, Hyundai Merchant will place orders for five container
vessels and two or three oil tankers later this year with the
state-backed financing program.

Feb 14, 2017

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