The government plans to pour 800 billion won into Hyundai Merchant Marine Co. this year for its normal management. With the funds, Hyundai Merchant Marine is planning to increase its global competitiveness by building a super container ship and acquiring shares in a new port in Busan.
According to Korea Ocean Business Corp. (KOBC) and Korea Development Bank (KDB) on Oct. 13, the government has recently prepared a plan to help normalize Hyundai Merchant Marine and is closely consulting with the company to expand its capital by 800 billion won by the end of the year.
If Hyundai Merchant Marine issues a new type of equity securities, KDB, the largest shareholder of Hyundai Merchant Marine, and KOBC, which was launched in July, are expected to purchase 400 billion won worth of securities each.
"Although we have yet to decide on the scale and method of the support, we will fix and announce the plan soon," a KOBC official said.
As other global shipbuilders are growing up by mergers and acquisitions and dominate the market with economies of scale, Hyundai Merchant Marine needs to be raised to the level of 1 million TEUs (1 TEU equals to a 20-foot container) to secure global competitiveness. The government also agrees on such strategies.
Hyundai Merchant Marine plans to build 20 large eco-friendly container ships, buy shares in four piers of Busan New Port, and purchase 1.5 million container boxes over the next five years. Industries estimate that more than 5 trillion won will be needed to implement this strategy.
An industry source predicts that Hyundai Merchant Marine will be able to secure about 5 trillion won of funds by combining the investment funds and the government's additional financial support for ships by the end of this year.
Meanwhile, KOBC, which was launched with the aim of rebuilding the domestic shipping industry, will take the helm of the realignment of the domestic shipping industry on the occasion of its support for Hyundai Merchant Marine.
By 2020, Hyundai Merchant Marine will be jointly managed by KOBC and KDB, and since then, KOBC will take over the management authority to lead restructuring.
