AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 3 July 2014 an agreement was signed between the Export-Import Bank's (Eximbank) of Korea and China to jointly grant economic support of USD 295 million to Chinese Minsheng Financial Leasing (MSFL) in the procurement of Korean built vessels. Specifically, the MSFL has ordered three 18,400 TEU container vessels from the Korean company Daewoo Shipbuilding & Marine Engineering (DSME) to be delivered by the second half of 2015.
The EximBank Korea will finance the deal, whilst the Eximbank of China will guarantee 50% of the loan to MSFL. The joint action is an outcome of the Reciprocal Risk Participation Agreement between the two banks established in 2013 (see related measure).
Korea Export-Import Bank to this end stated: 'While MSFL was weighing the merits of awarding the contract to a Korean shipyard, the two export credit agencies moved swiftly to finalize their financial cooperation plan on this deal and expressed their intent to co-finance it, decisively tilting MSFL's calculus in favor of DSME.'
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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