Korean shipbuilders are facing a dire liquidity problem with shrinking amount of down payment by decreasing new order and heavy-tail payment.
Sources said that yard financing is estimated to have been cut in half this year from KRW 5.4trn ($4.97bn) in 2009.
Therefore, major domestic shipbuilders issued massive corporate bonds and small-and-medium sized shipyards, having difficulties in securing refund guarantee, are failing to win new contracts.
Financial authorities set up measures to expand financing, for instance, enhancing arrangement of syndicated ship finances by commercial banks up to KRW 4trn, increasing finances by Korea Development Bank (KDB) up to KRW 3.5trn, etc. However, only KDB (about KRW 200bn) and Korea Finance Corporation (around KRW 100bn) have carried out the program.
Shipbuilding industries emphasize that financial system should be reformed that small-and-medium sized shipyards could actually access funding.
Shipbuilding player said "Major shipyards from rival shipbuilding countries, such as China, Europe, etc., are supported by government-run financial institutions as well as private-owned banks ranging from 60% to 80%," and pointed out that promotion of yard financing is really urgent in Korea.
Published : November 20, 2012
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