Korea to Ease Shipping Industry's Woes with 1.25 T Won Infusion

South Korea will inject 1.25 trillion won to the local shipping industry help provide more liquidity to shipping firms hurt by the pandemic.

Of that amount, 100 billion won will be allocated to ease ships' loan-to-value ratio to as much as 95 percent, from the current rate of between 60 and 80 percent.

"The shipping firms are expected to suffer more serious damage after the second quarter, considering the time lapse between the global economic turmoil and the decline in their performances," Oceans Minister Moon Seong-hyeok said.

Meanwhile, the Korea Development Bank and the Korea Ocean Business Corp. will allocate 470 billion won to cover maturing debts of Hyundai Merchant Marine Co. (HMM), the country's largest shipper.

HMM is seeking to make a turnaround in the third quarter.

With global cargo volume plummeting due to the COVID-19 outbreak, HMM plans to overcome the recession by increasing the size of its fleet and sharing new routes.

HMM is set to double its container ship capacity from 450,000 TEUs to about 900,000 TEUs when 20 large ships it had ordered are delivered.
It further plans to increase its shipping capacity to 1.1 million TEUs by 2022 through additional orders and charter ships.

HMM will put all of its 12 24,000-TEU vessels ordered in 2018, on the European route, which was scheduled to depart from Qingdao, China later this month