Seoul will launch a state-backed ship financing firm this month with initial capital of KRW1trn ($845m) to help the nation’s beleaguered lines and yards.
Under the plan, the new firm, likely to be called Korea Shipping Co, will be given a total of KRW6.5trn to help local shipping firms buy new vessels, the Ministry of Oceans and Fisheries said in its policy report to acting president and prime minister Hwang Kyo-ahn.
Korean shipyards have seen their orderbooks plummet to lows not seen in a decade while many shipping lines in the nation have gone bankrupt or skirted very close to financial collapse in the past 18 months.
That must get awfully close to a “prohibited subsidy” under general WTO guidelines and rules, as it would appear to make ship-building in other competing countries less competitive? It will be interesting to see if any country reacts – Japan for example.
More ships are not really very helpful right now, in most sectors.