The recently-launched state-run Korea Ocean Business Corporation announced it will support financially 10 small and medium South Korean shipping lines, in line with its efforts to boost the domestic maritime industry, on the aftermath of Hanjin Shipping bankruptcy in early 2017.
The corporation, under the Ministry of Oceans and Fisheries, selected the shipping lines as its primary negotiation partner with sale and lease back (S&LB) assistance to be provided.
According to data provided by Yonhap news agency, S&LB refers to the buying of a ship from a shipping line and then leasing the ships back to the owner. This can allow companies to receive fresh funds without disrupting normal operations.
Ships, owned by companies as Daebo International Shipping, Dong-A Tanker, DM Shipping and seven others, will benefit from the support measure that will involve some 74 billion won (US$66.2 million) being used to take over 10 vessels. The purchase is expected to be completed by November.
A survey on local shipping lines showed 19 companies want to sell 56 vessels under the S&LB arrangement, Yonhap reported.
Launched on 4 July, Korea Ocean Business Corporation is a public institution with a legal capital of 5 trillion won. It also includes Korea Shipping and Maritime Transportation and Korea Marine Guarantee Insurance.
Other potential actions of the fresh initiative will include investments into terminals, provision of market information to shippers, implementation of national shipping system to support shipping in emergency cases, as well as supporting the building of eco-friendly vessels going forward.
