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.