The financial authorities decided to enable the evaluation of the future value, including the project viability of the contracted ships, in the review for the issuance of Refund Guarantees (RG) for medium-sized shipbuilders, in order to activate the issuance of RG. RG is a system wherein the bank is responsible for the advance payment made by the shipowner if the shipbuilder fails to deliver the vessel after signing a contract with the shipowner. This means that the banks will not hold medium-sized shipbuilders accountable even if problems arise in the future.
Commissioner Kim Byeong-hwan visited Mokpo and Haenam on the 24th and listened to the challenges related to ship orders and RG issuance at a luncheon meeting with shipbuilders in the Jeonnam region. Attending the meeting were Daewoo Shipbuilding & Marine Engineering, Yuil Co., Kanplant, and Central Marine Engineering.
Chairperson Kim noted, "Although medium-sized shipbuilders are experiencing increased overseas orders and improved business performance due to favorable global shipbuilding conditions, financial institutions are assessing RG issuance based on past losses experienced during the shipbuilding industry restructuring process and current financial performance, which presents a challenge to sufficient issuance of RG needed for orders."
Chairperson Kim said, "In the future, we will push for the granting of exemption standards to actively reflect the project viability and future value of contracted ships in RG assessments, and we will encourage a wider variety of financial institutions, including the Export-Import Bank and financial companies, to participate in RG issuance, considering the improved business performance of shipbuilders."
The financial authorities will prepare the 'Guidelines for Ship Orders for Medium-Sized Shipbuilders' through consultations with banks and financial institutions. Based on the guidelines, cases where RG issuance passes an external accounting firm's project viability review will be designated as exempt from liability under the 'Regulations on Financial Institution Inspections and Sanctions.' The financial authorities stated, "We will encourage financial institutions that have been conservative in issuing RG for medium-sized shipbuilders to participate more actively in RG issuance."
After the meeting, Chairperson Kim visited the Daewoo Shipbuilding site to gather information on the company's status and shipbuilding processes.