HMM steams in with early (for box shipping) adoption of eB/Ls
South Korean state enterprise-owned shipping line HMM has this week committed to adopting electronic bills ...
GM: GAUGING RISKGXO: NEW BOT PARTNERWMT: CAPEX IN CHECKWMT: CFO ON AUTOMATION WMT: SPOTLIGHT ON AUTOMATIONHD: PRESSURE BUILDSFWRD: REVISED EBITDA MAERSK: TESTING ONE-MONTH HIGHFDX: UP UP AND AWAYRXO: COYOTE DEAL TAILWINDDSV: NEW REFI DEALR: WEAKENING AMZN: LIFESTYLE BATTLEKNIN: EXPANDED NETWORK OF CROSS-DECK FACILITIES
GM: GAUGING RISKGXO: NEW BOT PARTNERWMT: CAPEX IN CHECKWMT: CFO ON AUTOMATION WMT: SPOTLIGHT ON AUTOMATIONHD: PRESSURE BUILDSFWRD: REVISED EBITDA MAERSK: TESTING ONE-MONTH HIGHFDX: UP UP AND AWAYRXO: COYOTE DEAL TAILWINDDSV: NEW REFI DEALR: WEAKENING AMZN: LIFESTYLE BATTLEKNIN: EXPANDED NETWORK OF CROSS-DECK FACILITIES
South Korea’s state-backed ship finance institution Korea Ocean Business Corp (KOBC) is to provide more financial support to smaller feeder operators that operate mainly in the intra-Asia trades, now that the country’s flagship carrier, HMM, has been stabilised.
This week KOBC launched a special support programme. KOBC president Kim Yang-soo said: “Our efforts at broadening the scope of support are paying off.
“HMM’s finances turned to black in 2020. So we are diversifying our business to strengthen support for small and medium-sized shipping companies, aiming for South Korea to become a leading shipping nation.”
KOBC said in March it had established a team of relationship managers dedicated to supporting small and mid-sized shipping companies, after a pilot scheme that lasted a year. The team provides financial consultation and follow-up management.
In particular, KOBC is exploring methods of supplying more funding to build eco-friendly ships that comply with the IMO’s new regulations. So far, some $55m in loans has been granted to 18 shipping companies to build these vessels.
KOBC was established in July 2018 as part of a government five-year plan to revitalise the shipping industry after Hanjin Shipping’s collapse in 2016 made HMM the country’s largest shipping company.
HMM was also in financial difficulties and, through investment by KOBC, came under state control.
However, there was criticism from South Korea’s dozen or so feeder operators and other mid-sized shipping businesses, claiming KOBC’s support was concentrated on HMM, leaving little funding available for smaller operators to expand their fleets. The Ministry of Oceans and Fisheries always used HMM’s flagship status to justify that skewed support.
Last year, KOBC provided about $673,400 in liquidity support to HMM, a significant drop from the $1.02bn in 2020 and 2019’s $1.46bn. In terms of funding ratio from lenders, KOBC accounted for 0.1% of HMM’s loans in 2021, compared with 53.4% in 2020 and 64.3% in 2019.
In comparison, as part of emergency funding amid the Covid-19 pandemic, $25.67m was loaned to smaller shipping companies and another 28 companies were given interest rate reductions, amounting to $42.17m.
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