South Korean financial institutions have put up a loan package of nearly KRW200 billion (US$179 million) for Sinokor Merchant Marine, the country’s second largest container shipping group.
The financing is part of a move to support South Korea’s major shipping companies that are experiencing a liquidity crunch due to the Covid-19 pandemic.
Korea Development Bank and The Export-Import Bank of Korea will provide KRW120 billion (US$107.39 million) of long-term loans to Sinokor, while Korea Ocean Business Corporation (KOBC) will buy KRW75 billion (US$67.12 million) of bonds issued by Sinokor.
With 48 subsidiaries and affiliates worldwide and an asset base of KRW7 trillion (US$6.26 billion), Sinokor is regarded as one of the largest privately owned South Korean shipping companies. The company is now the twentieth largest container shipping company, with capacity of 91,993TEU, comprising 37 owned ships and 32 chartered vessels.
KOBC was established in 2017 as President Moon Jae-in’s administration sought to rejuvenate the financially troubled maritime industries.
Since July, KOBC has been discussing support measures for major shipping companies, holding talks with relevant ministries and policy lenders. The viability of such measures was assessed positively by an external accounting firm, said KOBC.
The measures aim to stabilise the shipping companies’ financial strength so they can weather the pandemic-induced recession, even as lawmakers criticised KOBC for disbursing significantly more loans to HMM than smaller South Korean shipping enterprises.
KOBC president Hwang Ho-seon said, “Pre-emptive support measures to counter the damage caused by the pandemic will protect our country’s industries and stabilise jobs and operations at shipping companies. We will continue to work with policy lenders to find solutions for the shipping community.”
Martina Li
Asia Correspondent
