The head of the Export-Import Bank of Korea (Eximbank) said the export credit agency will continue to enforce its plans to further restructure the ailing shipbuilding and shipping industries in the country in the last years.
Namely, the bank is talking with the Korea Development Bank (KDB) about a possible merger between Sungdong Shipbuilding and Marine Engineering and STX Offshore and Shipbuilding, the bank’s CEO Eun Sung-soo was quoted as saying by The Korea Times.
“When benefits and costs of debt restructuring are considered jointly, it becomes apparent that the economic costs of debt restructuring, both the cost to the creditors and the employment impact, are fully offset in the medium term by more rapid output growth and higher hiring,” he explained.
The country’s shipbuilding industry is hit by a decrease in new orders over the last few years, as a result from global economic downturn and Chinese competition. This has led major shipbuilders to restructure their business by implementing capacity and job cuts, but smaller and mid-sized shipbuilders, such as STX and Sungdong, are finding it difficult to follow suit, resulting in state-owned banks and other non-commercial banks directly intervening in the restructuring process, The Korea Times reported.
Mr. Eun noted the bank will continue providing financial assistance with shipbuilders to help them increase their exposure in the value-added shipbuilding and shipping business segments.
