ID :
52171
Wed, 03/25/2009 - 08:31
Auther :
Shortlink :
https://www.oananews.org//node/52171
The shortlink copeid
S. Korean shipbuilders call for support from state lenders
SEOUL, March 25 (Yonhap) -- South Korean shipyards are asking state-run lenders to increase loans and extend financing for orders as a deeper-than-expected economic slump dries up their cash holdings, industry sources said Wednesday.
According to the sources, the shipbuilding industry called for the Korea
Development Bank and the Export-Import Bank of Korea to increase their financing
for shipbuilding orders and extend loans for their operations.
The moves came as shipyards in South Korea, the world's largest shipbuilding
nation, suffered a sharp drop in shipbuilding orders.
Hyundai Heavy Industries Co., and other shipbuilders received record orders in
the past few years on rising shipbuilding demand. But shipbuilding orders have
all but vanished since September as declining global trade slashed cargo rates
and demand for new vessels.
"Some small shipbuilders face a liquidity shortage. Major players armed with
ample cash are also set to prepare for further potential difficulty," an official
at Samsung Heavy Industries Co., the world's second-largest shipbuilder.
In the first two months of the year, only Samsung Heavy has won a single
shipbuilding order valued at US$680 million. To compound their woes, shipping
lines worldwide reportedly are demanding that orders be canceled and delivery of
new ships be delayed.
To cope with vanishing cash reserves, local shipbuilders have recently tapped the
local debt market to raise up to 3 trillion won ($2.17 billion).
Hyundai Heavy, the world's leading shipyard, may sell debt worth up to one
trillion won soon, according to industry sources. Its cash and cash equivalent
dropped to 2.26 trillion won at the end of December from 4.14 trillion won three
months earlier.
Samsung Heavy also saw its cash and cash equivalents drop to a 2-trillion won
level recently from 3.37 trillion won at the end of September.
The shipyard, which sold 700 billion won worth of commercial paper last month, is
seeking to sell another 700 billion won worth of bonds this month.
Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest, is also
considering tapping the local bond market this month to raise up to 500 billion
won.
"Companies' cash holdings will continue to drop this year because of the severe
economic slump, and their cash flows are unlikely to improve any time soon," said
Lee Jong-woo, an analyst at HMC Securities. "They are preparing for that."
According to the sources, the shipbuilding industry called for the Korea
Development Bank and the Export-Import Bank of Korea to increase their financing
for shipbuilding orders and extend loans for their operations.
The moves came as shipyards in South Korea, the world's largest shipbuilding
nation, suffered a sharp drop in shipbuilding orders.
Hyundai Heavy Industries Co., and other shipbuilders received record orders in
the past few years on rising shipbuilding demand. But shipbuilding orders have
all but vanished since September as declining global trade slashed cargo rates
and demand for new vessels.
"Some small shipbuilders face a liquidity shortage. Major players armed with
ample cash are also set to prepare for further potential difficulty," an official
at Samsung Heavy Industries Co., the world's second-largest shipbuilder.
In the first two months of the year, only Samsung Heavy has won a single
shipbuilding order valued at US$680 million. To compound their woes, shipping
lines worldwide reportedly are demanding that orders be canceled and delivery of
new ships be delayed.
To cope with vanishing cash reserves, local shipbuilders have recently tapped the
local debt market to raise up to 3 trillion won ($2.17 billion).
Hyundai Heavy, the world's leading shipyard, may sell debt worth up to one
trillion won soon, according to industry sources. Its cash and cash equivalent
dropped to 2.26 trillion won at the end of December from 4.14 trillion won three
months earlier.
Samsung Heavy also saw its cash and cash equivalents drop to a 2-trillion won
level recently from 3.37 trillion won at the end of September.
The shipyard, which sold 700 billion won worth of commercial paper last month, is
seeking to sell another 700 billion won worth of bonds this month.
Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest, is also
considering tapping the local bond market this month to raise up to 500 billion
won.
"Companies' cash holdings will continue to drop this year because of the severe
economic slump, and their cash flows are unlikely to improve any time soon," said
Lee Jong-woo, an analyst at HMC Securities. "They are preparing for that."
