Hyundai Merchant Marine to Receive $515 Million From Government
A new shipping company created by South Korean state lenders for the expansion of terminals and fleets will be forking over $515 million to Hyundai Merchant Marine (HMM), a South Korean carrier and shipbuilder.
HMM will become the first beneficiary of Korean government rescue plans for companies in the maritime cargo transportation sector.
The new entity, dubbed Korea Ship, launched last week with initial capital of over $868 million from a group of government programs to revive the sinking shipping and shipbuilding industries. Hanjin Shipping, the country’s one-time largest ship liner, filed for bankruptcy in August 2016 and is now in the process of liquidation. HMM is currently under state bank management and is being groomed to take the place of Hanjin.
Ninety percent of the initial capital of the new state entity is coming from the Korea Development Bank and the Export-Import Bank of Korea, both state lenders, and the remainder from Korea Asset Management Corp. The program is designed to strengthen local shipping companies against industrial slowdowns. Among other things, Korea Ship will be buying vessels and other assets from cash-strapped shipping companies and then leasing them back. It will also buy bonds issued by HMM.