South Korea Rolls Out Shipping Rescue Plan!

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South Korea is said to be planning to set up a state-backed financing company to help improve the financial health of the country’s marine transport industry following the recent collapse of Hanjin Shipping.

The government said it would establish a state-backed financing company worth 6.5tn won ($5.7bn; £4.7bn) to help both shipping and shipbuilding industries.

The move is designed to help support struggling local ship-building and shipping industries and follows the bankruptcy in August of South Korea’s Hanjin Shipping Co – the world’s seventh-largest container shipper.

Shares in Hanjin Shipping have jumped more than 26% on the news of the government’s decision to step in.

Globally, shipping is suffering from overcapacity and weak economic growth.

“As an export economy, South Korea is heavily dependent on the shipping industry,” maritime trade analyst.

“But slowing consumer demand has put the brakes on its export cargo volume.  Hanjin Shipping, its largest carrier is bankrupt, debt-ridden HMM is owned by Korea Development Bank, and the shipyards have seen orders all but vanish this year as domestic and foreign orders have dried up.”

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Source: BBC, WSJ, Bloomberg

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