South Korea decided to invest $1.2 billion in Korea Ocean Business Corporation. The country created this entity, in order to help its shipping industry stand on its feet, especially after the bankruptcy of Hanjin Shipping.
The Ministry of Maritime Affairs and Fisheries informed on Tuesday, July 24, that it will allocate government stakes of 12.7% in its four port authorities – Busan, Ulsan, Incheon, and Yeosu Gwangyang, through the Korea Ocean Business Corporation. This investment amounts to $1.2 billion.
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Korea Ocean Business Corporation was launched earlier in July, to support the struggling South Korean shipping industry. It will try to help the shipping industry, by investing in new ships or providing payment guarantees for shipbuilding orders. According to local media, some of its potential actions will be purchases of used vessels to re-charter them, provision of market information to shippers, implementation of national shipping system to support shipping in emergency cases.
The corporation will also support the building of 200 new vessels for Korean shipping companies over the next three years. Under this light, Korea will make an equity investment for 30% of the construction cost for 40 vessels and provide payment guarantees up to a certain amount for the remaining 160.
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.