ANNOUNCED AS TEMPORARYNo
State aid, nes
On 7 July 2009, the state-owned Korean Asset Management Corporation (KAMCO) started the implementation of a sale-and-leaseback scheme for Korean shipping companies. Participating companies improve their liquidity position as they may sell and lease back part of their fleet. In the first round of this scheme, shipping companies successfully offered 62 ships to KAMCO. When business improves, the companies have the option to buy back sold ships.
The scheme was first officially announced on 23 April 2009. According to an official news site: "For one, the government will establish a fund worth some 4 trillion won (US$3 billion) to purchase about 100 vessels from struggling shipping companies, to start probably in June, in order to keep the companies from selling their ships at dirt-cheap prices to overseas companies as part of restructuring efforts.
"The envisioned fund will be collected from the state-run debt clearer Korea Asset Management Corporation, credit banks and private investors, as well as the government.
"In addition, the government will expand credit lines to boost sales of ships being constructed by cash-strapped shipyards."
The scheme is said to last until the end of the year. KAMCO is expected to buy ships consecutively in batches of 20. According to a KAMCO spokesman, there may also be a second round for applications later in 2009.
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