Seoul to buy HMM ships for US$644 million, then lease them back
KOREA's troubled container carrier, Hyundai Merchant Marine (HMM), said it will receive KRW750 billion (US$644 million) from the government, which is expected to buy and charter back vessels to the shipping company, reports American Shipper.
This is expected to be conducted through a new entity called the Korea Shipping Company, which will buy ships from HMM and lease them back, HMM said.
Details of the plan were said to be incomplete and contradictory, but HMM pointed to Pulse News, a website affiliated with Maeil Business News Korea, which said HMM will be "the first beneficiary to a set of Korean government rescue schemes for shipping and shipbuilders."
The Pulse report quoted an anonymous government official, who said HMM would receive over KRW600 billion, for the "expansion of terminals and fleet."
Said Pulse: "The new entity, in which 90 per cent of the initial capital would come from state lenders Korea Development Bank and the Export-Import Bank of Korea and the remainder from the country's debt clearing house Korea Asset Management Corp (KAMCO).
KAMCO's role is help strengthen local shipping companies against protracted industrial slowdown. It will act as a tonnage bank by buying vessels and assets from liquidity-short shippers at market price and lease them back."