Korean Government to Set Up a Support Body for Shipping Industry.


Korea Maritime Promotion Corporation, a dedicated support
organization for the shipping industry, will be established in Busan
in June of next year with capital of 5 trillion won (US$4.5 billion).

The Ministry of Oceans and Fisheries announced a plan to establish
Korea Maritime Promotion Corporation on August 24 at the meeting of
the ministers of economic affairs at Seoul Government Complex
Building. The establishment of the corporation is based on the
construction of a shipping and shipbuilding powerhouse through the
coexistence of shipping and shipbuilding, one of the top 100 national
projects set by the new government.

Korea Maritime Promotion Corporation will deal with the financial and
industrial policy support tasks necessary for the reconstruction of
the shipping industry in Korea which withered away due to a long-term
recession coupled with the "Hanjin Shipping bankruptcy." The
corporation will also take on existing maritime financial support
programs and provide financial support services such as investment in
and guarantee for vessels and terminals, purchases of secondhand
vessels and re-chartering. The corporation will also provide
information on market conditions to support deals on shipping
services, promote projects to stabilize shipping company management
such as the replacement of old vessels, and operate the nation''s
essential shipping system to help transport cargoes in emergencies.

The government set up Korea Maritime Promotion Corporation with the
initial paid-in capital of 3.1 trillion won (US$2.79 billion). Among
the capital, 1 trillion won (US$900 million) will come from Korean
Ships and Oceans, 550 billion won (US$495 million) from Korea
Maritime Guarantee Insurance and 1.55 trillion won (US$1.39 billion)
from the government. If necessary, the company will increase its
capital to 5 trillion won (US$4.5 billion) through additional
investment.

On the other hand, the government announced on the day that it will
issue a 100 billion won (US$90 million) special guarantee for refund
guarantees (RGs) issued by the Korea Development Bank and the
Industrial Bank of Korea for small and medium-sized shipbuilders
facing bankruptcy crises due to deteriorating global market
conditions. An RG is a guarantee which a financial institution gives
a shipowner instead of a down payment if a shipbuilder becomes unable
to deliver a ship due to its bankruptcy during shipbuilding. When an
RG is issued, a shipbuilder can land an order.