Thursday, March 24, 2016

KOREA DEVELOPMENT BANK, CONTAINER SHIPS, HYUNDAI MERCHANT MARINE

Korea Development Bank sets up containership fund

The fund will prioritize orders for 13,000-TEU containerships, potentially supporting an additional 15 to 20 vessel orders, according to an investment advisory note from Wells Fargo.

   The Korea Development Bank (KDB) has set up a $1.2 billion containership lending fund with four other financial institutions to finance containership orders, and reinforce the competiveness of South Korean owners, according to Wells Fargo Securities.
   In its weekly shipping research note, Wells Fargo said KDB has indicated it would “prioritize orders for 13,000-TEU containerships, potentially supporting an additional 15 to 20 vessel orders (based on current asset values, assuming 60% financing).”
   “While containership ordering has slowed significantly over the past quarter, we believe the KDB fund will provide incremental containership financing for well-placed owners,” it added.
   Meanwhile, South Korea’s Yonhap News Agency on Thursday quoted unnamed sources as saying some creditors of shipping conglomerate Hyundai Merchant Marine (HMM) have rejected a proposal by KDB to roll over maturing debts.
   The Korea Herald reported that Moon Chul-sang, chairman of the National Credit Union Federation of Korea, openly opposed the idea of extending debt maturity and debt-equity swap for HMM at a press conference on Wednesday.
   Yonhap also cited sources as saying talks to cut charter rates “have not shown progress,” but the Korea Herald quoted an HMM spokesman as saying those talks “will be completed by the end of April.”
   In addition, Yonhap said that as of tomorrow bids are due for companies vying to buy Hyundai Securities, a company the Hyundai Group is trying to sell as part of the “self-rescue plan” for HMM. However, it said one potential bidder, Mirae Asset Financial Group, has indicated it will not bid for the securities firm.