The Financial Services Commission (FSC) of South Korea is to carry out a major ‘three-track’ system of corporate debt restructuring on some of the country’s biggest shipping and shipbuilding companies, including Hyundai Merchant Marine, Hanjin Shipping, Hyundai Heavy Industries and Samsung Heavy Industries, according to The Korea Herald.
This announcement comes in response to previous news by PTI that the Finance Minister of South Korea had called for an industry solution to resolve cash flow decline.
Yim Jong-yong, Chairman of FSC, said: “We have asked for support from the Finance Ministry and the Bank of Korea. The need to boost their capital base comes as policy banks must meet basic financial health to pre-emptively deal with the upcoming restructuring. The government will seek support from lawmakers to minimise risks, but we should abide by a (market) principle and not get too involved with the problems facing each company.”
PTI also previously reported on a call to action that South Korea’s top three shipbuilders merge their operations in a bid to survive.
HMM and Hanjin were also called out to merge in a bid to tackle an industry wrought with overcapacity and low freight rates.
Despite these apparent difficulties, South Korea has shown interest in making investments into Iran’s port and shipping infrastructure.
The country recently reached a US$15 billion agreement with Iran to ease transport through territorial waters.