AsiaFinance and InsuranceShipyards

Seoul ditches debt ratio stipulation to access shipbuilding fund

Korean shipowners will only need to show a charter contract of five years or more to get state-run banks to fund newbuildings in sweeping changes to the local ship finance scene coming in, designed to stimulate orders at the nation’s moribund shipyards.

Currently owners wanting to tap into a shipbuilding fund led by the Korea Development Bank have to show they have a debt ratio of less than 400%. This stipulation is now being waived.

South Korean shipyards have endured their worst year for new orders in a generation with thousands of people laid off.

In other Korean ship finance news, the KDB signed today a contract with private financial institutions to establish a fund worth KRW500bn won ($418.8m) for Korean shipping companies.

The bank signed with Mirae Asset Securities and its affiliated Multi Asset Global Investments to form the new fund.

“We hope the new fund co-founded by a policy bank and leading private financiers will propose a new model of cooperation between financial policy and commerce,” said Lim Hae-jin, vice president of KDB.


Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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