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Wednesday, April 08, 2009

S3bn worth of aid authrorised for Korean owners

Seoul: The South Korean government will launch a 4 trillion-won (US$3bn) fund to help local shipping companies, government officials said Tuesday.
According to the Ministry of Land, Transport and Maritime Affairs and the Financial Services Commission (FSC), the government will approve the launch of the fund during a meeting on Thursday to enhance the nation's shipping industry.
The government, with the money from the fund, plans to purchase ships from struggling local shipping companies, which would otherwise have to sell those assets at excessively cheap prices to foreign investors.
The state-run debt clearer Korea Asset Management Corp., credit banks and private investors will participate in setting up the fund, according to the ministry.
The move comes as local owners have been hard struck by the global financial crisis and the slumping economy, with some also struggling with a liquidity squeeze. So far three Korean lines have gone to the wall since the start of the global financial crisis with certain other big names also warding off bankruptcy. [08/04/09]