South Korea plans to provide 11.5 trillion won ($8.8 billion) of shipping finance this year to help shipowners pay for existing contracts and place new orders.
‘ State-owned Export-Import Bank of Korea and Korea Export Insurance Corp. will give guarantees, insurance coverage and loans to global shipping lines, the Ministry of Strategy and Finance, the Ministry of Knowledge Economy and the Financial Services Commission said in a joint statement. The worst credit crisis since the Great Depression has made it difficult for shipowners to meet payment schedules, forcing them to cancel orders or ask shipyards for deferrals. The cash reserves of shipbuilders have also shrunk as orders slumped since the third quarter. “The government decided to push for progressive restructuring plans and provide more liquidity because the global credit crisis has practically dried up orders for new ships worldwide,” according to the statement. “Domestic shipyards won only one order in the first quarter.