HANSA 01-2019

Finanzierung | Financing
Industries, for long-term charter to local
steel mill POSCO. Later in July 2018,
KOBC chose 10 mid-sized ship operators
to receive nearly 67 mill. $ through saleand-leaseback
deals.
Ultimately, HMM’s survival is of
paramount importance. In August
2018, during the signing of an agreement
with the Korea Shipowners
Association, KOBC’s CEO, Hwang
Ho-Seon, said that HMM needs significant
resources to gain the necessary
scale to compete against the European
big boys.
He said: »It is a known fact that HMM,
which is South Korea’s flagship carrier,
needs support to compete against international
large-scale liner operators. We
will do our best, through continuous support,
to prevent HMM from falling behind
its competitors.«
KOBC and KDB are considering funding
of 5 tr. KRW (4.45 bn. $) for HMM’s
fleet expansion, and this would be carried
out through the issuance of bonds.
Hwang reiterated his position in October
2018, when he told local media that
no resources would be spared to support
South Korean ship owners.
During the same month, KOBC stood
as a guarantor for 101 mill. $ of loans disbursed
by Busan Bank and Suhyup Bank
to Polaris Shipping, SK Shipping, Heung-A
Shipping and Korea Line Corporation.
It is clear that KOBC would need more
than its current amount of finance, as its
pledge to help local ship owners, of which
many are highly leveraged, is a capital-intensive
undertaking.
South Korean lawmakers have asked
the government to inject more funds into
reviving the maritime industry, claiming
that existing efforts are not enough.
Speaking at a parliamentary session,
representative Lee Man-hee of the Liberty
Korea Party pointed out that the Chinese
government was giving the equivalent
of 50 tr. KRW (44 bn. $) of support to
the China COSCO group.
»We will do our best, through
continuous support, to prevent
HMM from falling behind
its competitors.«
Lee said, »[Based on financing agreements
already concluded] we are providing
100 bn. KRW of support to companies
that are undergoing some kind
of integration or consolidation and
200 bn. KRW of assistance in operating
capital to these companies. It has been
three months since the Korea Ocean
Business Corporation (KOBC) was
formed but a specific business plan has
yet to be developed.«
In response, the minister of oceans
and fisheries, Kim Young-choon, said,
»We plan to invest at least 8 tr. KRW in
reviving the maritime industry, through
KOBC. Of this amount, 3.15 tr. KRW
will finance Hyundai Merchant Marine’s
(HMM’s) recent order for 20 container
vessel newbuildings.«
However, the South Korean government’s
support for the industry has
caused controversy.
On 13 November 2018, the Japanese
government lodged a complaint at the
World Trade Organization (WTO), alleging
that South Korea contravened
free-market principles by subsidising
struggling shipbuilders. Particularly,
loans granted by KDB, Export-Import
Bank of Korea (KEXIM), KOBC,
and Korea Trade Insurance Association
(K-Sure), were singled out for criticism by
the Japanese government.
In its complaint, the Japanese government
said, »Japan is concerned
about the provision by Korea, directly
and/or through public and private institutions
owned, controlled, entrusted,
and/or directed by the Korean government,
of guarantees or other types of
insurance on sales-specific payments or
financing on non-commercial terms.«
Supporting Tokyo’s complaint is the
German Shipbuilding and Ocean Industries
Association (VSM), which has
echoed criticism of South Korean state
aid and loans.
The South Korean government has
made known its intention to defend its
actions and, through its Ministry of
Trade, Industry and Energy, issued a terse
statement that funding disbursed by
KOBC and other state policy lenders is
within legal guidelines.
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HANSA International Maritime Journal – 156. Jahrgang – 2019 – Nr. 1 27