South Korea’s debt clearing house, Korea Asset Management Corp. (KAMCO), will take over a mix of 20 container and bulk vessels on May 15 and lease them back to the ocean carriers, according to a report from Pulse News.
South Korea’s debt clearing house, Korea Asset Management Corp. (KAMCO), will sign a contract to acquire 20 container and bulk vessels worth 390 billion won (U.S. $344 million) from six carriers on May 15, according to Pulse News, a website affiliated with Maeil Business News Korea.
The six carriers include SM Line Corp., Korea Shipping Co., Korea Line Corp., Namsung Shipping Co., Dooyang Ltd., and Pan Ocean Co.
Ten of the 20 vessels were previously owned by now-defunct Hanjin Shipping, which filed for court receivership in its native South Korea in late August 2016, and was officially declared bankrupt by a South Korean bankruptcy court in February 2017.
KAMCO will cover 230 billion won of the total price for the 20 vessels, and the six carriers will cover the remaining 160 billion won, Pulse reported.
KAMCO and the six carriers will then invest the 390 billion won into KAMCO Ship Investment Company, which will create 20 special purpose companies (SPCs) and lend money to them. The SPCs will take over the vessels, which will be leased back to the carriers.
With the fund, the cash-strapped carriers will be able to boost their financial health by paying off debts with high borrowing costs, and switching from short-term loans to long-term loans, Pulse said. In addition, Pulse noted the help from the government could help ease the financial troubles of SM Line, the nation’s newest carrier, which acquired some of the major assets of Hanjin Shipping.
KAMCO to take over 20 vessels owned by six carriers
