South Korea is set to establish a state-ba[ds_preview]cked shipping fund with initial capital of 845 mill. $ to help jack up the financial situation of local shipping companies.
As the South Korean newswire Yonhap reports, a total of 6.5 trill. won (5.5 bill. $) will be provided to help local shipping companies buy new vessels, the Ministry of Oceans and Fisheries said in its policy report to Prime Minister Hwang Kyo-ahn.
The measures aim to support local shipping companies, as well as shipbuilders, struggling with falling new orders and mounting losses.
Last year, the government has vowed to support the local shipping industry as Hanjin Shipping Co., the country‘s No. 1 shipping firm, was put under court receivership in September with heavy debts.
Daewoo Shipbuilding & Marine Engineering Co. (DSME) and other local shipyards have been suffering from a sharp drop in new orders, massive losses stemming from a delay in the construction of offshore facilities and increased costs.
The state-backed firm, tentatively named »Korea Shipping Co.«, is tasked with taking over container ships from ailing shipping companies and leasing them back to the shippers to help such companies stay afloat.
The government also plans to create a 1.9 trill. won fund for the local shipbuilders to help win more orders. Meanwhile, the ministry said a total of 3.7 trill. won will be spent this year to develop and maintain seaports.
