South Korea’s debt clearing house – Korea Asset Management Corp. (KAMCO), is set to take possession of 20 shipping vessels worth 390 billion won ($344 million). The vessels are currently owned by six Korean shipping firms, including SM Line Corp., Korea Shipping Co., Korea Line Corp., Namsung Shipping Co., Dooyang Limited and Pan Ocean Co. on May 15. Of the 20 vessels, 10 were previously owned by Hanjin Shipping.
KAMCO and the six shipping companies will invest 390 billion won in KAMCO Ship Investment Company, who will then establish 20 special purpose companies (SPC) and lend money to them. The SPCs will take over the vessels that will be leased back to the shippers. With the investment, the cash-strapped shipping lines would be able to improve their financial health by paying off debts with high borrowing costs and switching from short-term loan to long-term one.
This plan will ease the financial troubles of the nation’s new container line – SM Line, who acquired major assets of Hanjin Shipping. With the newly raised fund, the struggling shipping company would be able to keep Hanjin Shipping’s key workers and operation system.