Shipbuilders need more money

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Shipbuilders need more money

The nation’s chief economic policy maker has hinted that the money needed to overhaul Korea’s debt-ridden shipbuilders and shipping companies will be more than the market’s estimate of 5 trillion won ($4.4 billion).

Deputy Prime Minister for the Economy and Finance Minister Yoo Il-ho expressed frustration about comments made by top Bank of Korea officials that a public consensus is needed before the central bank would purchase bonds and securities from policy banks to aid in restructuring.

Yoo said it was questionable whether the restructuring of the shipbuilding and shipping industries could be done for 5 trillion won on Monday during a press conference held in Frankfurt, where he was visiting to attend an annual meeting for the Asian Development Bank.

“Won’t it take some time before the fiscal authority or the monetary policy authority can say [exactly] how much [the restructuring] would cost?” Yoo asked rhetorically. “We have to see results on the charter fee negotiation, for which the deadline is set, and we may not get the answer in just a couple of days.

“At this stage, it is difficult to say how much finance will be needed for the restructuring.”

The government gave Hyundai Merchant Marine until the end of this month and Hanjin Shipping until the end of July to complete negotiations with foreign shipowners on lowering charter rates. The Korean government stressed that if the companies failed, it would not support them and they would go into court receivership.

Hefty charter costs are a key factor in the shipping companies’ big losses.

Regarding recent comments from Bank of Korea officials, Yoo said he didn’t know what they meant.

After the central bank was criticized by the government about the comments, the Bank of Korea changed its stance and pledged full support for the restructuring.

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