The Korea Herald


Banks' exposure to 3 shipbuilders, 2 shippers jump 4.8 tln won

By 안성미

Published : June 6, 2016 - 11:02

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South Korean banks' loans to the country's three biggest shipbuilders and two major shipping lines jumped 4.8 trillion won (US$4 billion) in the past two and a half years as they borrowed more to continue operations, data by a private corporate firm showed Monday.
Bank loans extended to Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. climbed 4.5 trillion won to 50.54 trillion won at the end of April from 46.06 trillion won as of end-2013, according to Korea Enterprise Data (KED).

Bank lending to Hanjin Shipping Co. and Hyundai Merchant Marine Co. also rose nearly 300 billion won to 1.79 trillion won from 1.49 trillion won during the same period, the KED data showed.
Shipbuilders have inked heavy losses in recent years due to declining orders and climbing costs since the 2008 financial crisis. Shipping lines have also suffered hefty losses due to an oversupply of vessels and falling shipping rates.
As a result, their creditor banks have demanded drastic restructuring in exchange for a rollover of existing debts and a delivery of fresh loans by the lenders.
Among the creditors, the Export-Import Bank of Korea carried the highest debt exposure of 25.1 trillion won to the three shipbuilders as of April and the Korea Development Bank had the biggest debt exposure of 1.16 trillion won to the two shippers, the latest data said. (Yonhap)