ID :
57046
Thu, 04/23/2009 - 16:12
Auther :
Shortlink :
https://www.oananews.org//node/57046
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Gov't to create fund for struggling shipping lines
SEOUL, April 23 (Yonhap) -- The government will establish a fund worth some 4
trillion won (US$3 billion) to purchase vessels from struggling shipping
companies as part of efforts to help industries buffeted by the protracted global
economic downturn, officials said Thursday.
In a related move, the government will expand credit lines to boost sales of
ships being constructed by cash-strapped shipyards or shippers, while easing
overall regulations to stimulate such transactions.
The moves are part of sweeping measures unveiled by the government to enhance the
international competitiveness of local shipping companies. They were decided at a
meeting presided over by President Lee Myung-bak earlier in the day.
"We drew up those measures to help shipping lines struggling in the wake of
global financial turbulence last year and the downturn in the real economy," the
Ministry of Strategy and Finance said in a statement.
The 4-trillion won fund will be used mostly to purchase ships from struggling
local shipping lines which have to sell their assets as part of restructuring
efforts. The purchases will likely start as early as June with around 100 ships
being bought at market prices, officials said.
The state-run debt clearer Korea Asset Management Corp., credit banks and private
investors will participate in the fund, the ministry explained. The government
will inject 1 trillion won in the envisioned fund.
Through the Export-Import Bank of Korea, the government will also provide up to
4.7 trillion won in loans to be used for purchase of the ships being constructed
by cash-strapped shipyards and shippers, the ministry said.
Those measures were announced as local shipping companies have been feeling the
pinch of the global financial crisis and the slumping economy, with some facing a
severe liquidity squeeze.
Experts have warned that a possible bankruptcy chain reaction will undermine the
soundness of the shipbuilding and banking sectors, dealing a harsh blow to the
whole economy.
The government will finalize its assessment on financial and business conditions
of 38 large-sized shipping lines this month before deciding which companies
should be weeded out. An assessment of another 170 smaller firms will also be
completed by the end of June.
kokobj@yna.co.kr
(END)
trillion won (US$3 billion) to purchase vessels from struggling shipping
companies as part of efforts to help industries buffeted by the protracted global
economic downturn, officials said Thursday.
In a related move, the government will expand credit lines to boost sales of
ships being constructed by cash-strapped shipyards or shippers, while easing
overall regulations to stimulate such transactions.
The moves are part of sweeping measures unveiled by the government to enhance the
international competitiveness of local shipping companies. They were decided at a
meeting presided over by President Lee Myung-bak earlier in the day.
"We drew up those measures to help shipping lines struggling in the wake of
global financial turbulence last year and the downturn in the real economy," the
Ministry of Strategy and Finance said in a statement.
The 4-trillion won fund will be used mostly to purchase ships from struggling
local shipping lines which have to sell their assets as part of restructuring
efforts. The purchases will likely start as early as June with around 100 ships
being bought at market prices, officials said.
The state-run debt clearer Korea Asset Management Corp., credit banks and private
investors will participate in the fund, the ministry explained. The government
will inject 1 trillion won in the envisioned fund.
Through the Export-Import Bank of Korea, the government will also provide up to
4.7 trillion won in loans to be used for purchase of the ships being constructed
by cash-strapped shipyards and shippers, the ministry said.
Those measures were announced as local shipping companies have been feeling the
pinch of the global financial crisis and the slumping economy, with some facing a
severe liquidity squeeze.
Experts have warned that a possible bankruptcy chain reaction will undermine the
soundness of the shipbuilding and banking sectors, dealing a harsh blow to the
whole economy.
The government will finalize its assessment on financial and business conditions
of 38 large-sized shipping lines this month before deciding which companies
should be weeded out. An assessment of another 170 smaller firms will also be
completed by the end of June.
kokobj@yna.co.kr
(END)
