The Export-Import Bank of Korea (Korea Eximbank) will inject KRW 400 billion to cash-strapped Korean shipping companies.

During a Bank forum for finance representatives of eight major domestic shipping companies, Korea Eximbank announced support plans for shipping companies struggling as a result of the recession in the industry.

The forum was held near Korea Eximbank headquarters and attended by the finance representatives of eight major Korean shipping companies* as well as representatives of Korea Ship Finance and Korea Shipowners’ Association.

* Participants include Hanjin Shipping, Hyundai Merchant Marine, STX Pan Ocean, SK Shipping, Korea Marine Transport, Sinokor Merchant Marine, Heung-a Shipping, and Pan Continental Shipping

Recently, commercial banks, both domestic and foreign, have reduced financing and increased interest rates for shipping companies.

Such situations considered, Korea Eximbank devised measures to provide flexible financial support for Korean marine transport companies to overcome the economic slump and advance to the front-runner position in the world’s marine transport industry.

Korea Eximbank will be providing more than USD 400 million to Korean shippers operating shipping businesses abroad, of which more than USD 200 million will be given to Korean shipping SMEs that have relatively more difficulty obtaining funds.

For companies with sound profit structures (for example, securing profitability by concluding charter contracts before ship delivery) the Bank will increase the debt to ship price ratio from 70% to 80%.

In addition, the Bank will consider temporarily suspending Loan to Value (LTV) ratio requirements if the recession in the marine transport industry persists and drags down ship prices.

Moreover, Korea Eximbank will actively strive to stimulate Korean ship financing by pursuing co-financing and forming shipping funds with commercial banks.

Young Hwan Seol, Executive Director of Korea Eximbank, commented, “A prolonged slump in the marine transport industry will lead to difficulties for steel manufacturing industries and small and medium-sized suppliers. Korea Eximbank, in addition to its direct financing support, will cooperate with ship finance funds and commercial banks to devise ways to help Korean shipping industries overcome the current difficulties and develop in the medium-long term."

Last year, Korea Eximbank extended USD 260 million for Korean shipping companies last year, including small and medium-sized marine transport companies which have found it especially difficult to secure funding.