Korea Eximbank offers loan to Greek shipper

The Export-Import Bank of Korea (Korea Eximbank) will provide financial support for a Greek shipper that placed an order with Hyundai Heavy Industries (HHI) as part of the bank’s effort to help finance the shipper amid a prolonged recession in the industry.

Korea Eximbank said yesterday it will offer a $170 million loan for Oceanbulk Container, the third-largest shipper in Greece, after the company signed a $680 million contract with Korea’s largest shipbuilder to purchase eight container vessels.

Oceanbulk Container, founded by a U.S. private equity fund Oaktree in 2013, specializes in container vessels.

The support from Korea Eximbank is the first it has offered since relocating to Busan, the country’s second-largest city, on Sept. 29.

As part of the government’s effort to maximize the effectiveness of marine finance, relevant institutions have moved their marine units to the new Busan International Finance Center building, in the south-central part of the city.

Along with Korea Eximbank, Korea Trade Insurance Corporation (Ksure) and Korea Development Bank’s marine finance businesses have created the Maritime Financing Center (MFC), a collaborative organization for marine money.

Ksure will also provide $170 million for the Greek company in collaboration with the bank, making this the first time marine finance-related institutions have cooperated on an overseas project.

“As local shipbuilders see declines in order volume and experience intensifying competition with Chinese and Japanese rivals, they are having a difficult time,” an official at Korea Eximbank said.

“The MFC will provide preemptive financial services for local shipbuilders to help them win orders easily.”

HHI will construct the eight container vessels in its Ulsan Shipyard this year and start delivering them in January.

Financing the latest deal is meaningful for the bank because its earnings based on the foreign exchange rate will be as high as 84 percent of the total order value, thanks to the use of domestically produced parts and materials.

Since the launch of the MFC, Korea Eximbank has been working on financial programs for shippers around the world, including a fund for eco-friendly ships and introducing a refinancing system for Korean shipbuilders.

BY SONG SU-HYUN [ssh@joongang.co.kr]