South Korea approved funding of shipping industry worth 1.2 billion USD, which aims to boost the maritime sector of the country and to support the delaying economy. The fund will be led by local commercial banks and state-controlled finance companies, including Korea Trade Insurance Corporation, Korea Development Bank and Export-Import Bank of Korea. The money will be used to guarantee acquisition of new vessels ordered in the country shipyard, as well as well development and modernization. This will both stimulate and provide stability shipping and shipbuilding industries.
The fund, which will stimulate the shipping industry, would received 50% from the finances in form of bonds from commercial banks, while state-controlled banks will have 40% from the fund in form of subordinated bonds. The remaining 10% from the fund will be covered by the shipping companies.
With establishing of the 1.2 billion USD fund for stimulation of the shipping, South Korea aims to bring stability in the sector and facilitate ship owners investment into new vessels, which will also stimulate the problematic shipbuilding companies Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries, which suffer from decreasing number of orders and have millions of unpaid wages. The both industries are very important for the country economy, providing large stake from the economy and GDP. The country’s shipping companies have been struggling to keep their financial health despite deteriorating market conditions, having problems to maintain competitive and high-effective fleet.
Source: http://www.newsmaritime.com/2016/south-korea-approved-funding-of-shipping-industry-worth-1-2-billion-usd/
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