ANNOUNCEMENT 15 Jul 2013

On 15 July 2013, the Export-Import Bank of Korea (Korea Eximbank) announced the provision of a financing loan to a United Kingdom-based company to facilitate the purchase of Korean ships.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Export-Import Bank of Korea, Government-Mandated Financial Institutions Team up to Back Shipbuilding Industry, 15 July 2013. Available at: https://www.koreaexim.go.kr/site/program/board/basicboard/view?currentpage=20&menuid=002001007&pagesize=10&boardtypeid=284&boardid=16888

Inception date: 15 Jul 2013 | Removal date: open ended

Trade finance

On 15 July 2013, the Export-Import Bank of Korea (Korea Eximbank), K-Sure and KoFC announced the joint provision of a financing loan to Golar LNG Limited, a United Kingdom-based company to facilitate the purchase of Korean ships.

The USD 450 million Direct Loan from Korea Eximbank would be used to finance Golar LNG Limited's USD 170 million purchase of six LNG carriers and two Floating Storage and Regasification Units from Samsung Heavy Industries. In addition, the Korea Trade Insurance Corporation (K-sure) and Korea Finance Corporation (KoFC) will provide further financing of USD 450 million and USD 50 million respectively. 

In this context, Korea Eximbank stated that it intends to provide further Direct Loans in cooperation with K-Sure and KoFC, "in light of the fact that China, Korea’s chief shipbuilding rival, is aggressively expanding its volume of ship finance ... [It plans to provide more Direct Loans to foreign ship buyers] especially to buyers of high value-added ships such as drill ships and LNG carriers. The intent is to provide indirect support to the fragile shipbuilding and shipping industries at home."

Ship financing
The Eximbank of Korea operates with various financial instruments, including Direct Loans and Comprehensive Guarantees, to promote its maritime sector. Direct Loans are provided to foreign buyers when financing their purchase of specific Korean maritime goods, whilst a Comprehensive Guarantee is provided for ship buyer's repayments. More information on the Bank's financial instruments can be found on the official website or the "Guide to the Import-Export Bank of Korea" publication.

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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