The Ministry of Oceans and Fisheries said on the 28th it will roll out a liquidity support package, including a new unsecured credit guarantee, with the Korea Ocean Business Corporation (KOBC) to ease management difficulties at domestic shipping companies caused by the Middle East war.
Since the outbreak of the Middle East war, a total of 26 domestic vessels have been stranded in the Strait of Hormuz. Their operators are facing higher insurance surcharges, increased fuel costs, and higher risk allowances for crew. On top of that, the operating environment is deteriorating as some shippers forgo loading due to rising freight rates.
In response, the Ministry of Oceans and Fisheries (MOF) and the Korea Ocean Business Corporation (KOBC) will provide unsecured credit guarantees to these shipping companies. With the Minister's approval, this will be newly implemented, allowing companies to raise short-term operating funds without collateral burden. The support limit is up to 2.5 billion won per company. The guarantee period applies to short-term loans within one year and can be extended for up to five years.
In addition, the Ministry of Oceans and Fisheries (MOF) decided to improve how emergency management stabilization funds are provided. The ministry plans to cut the time to support by up to three weeks. It also said the improvement will reduce expense burdens, including various fees. The support limit is up to 3 billion won per company, with a maturity of one year that can be extended once for one year.
Besides the newly eased emergency management stabilization funds, companies can also receive the existing emergency management stabilization funds, with a limit of up to 100 billion won per company, if needed.
In addition, the principal and interest repayment periods of existing financial products reaching maturity will be extended, and the loan-to-value (LTV) ratio for ship-collateralized loans will be temporarily raised from the current 60–80% to 70–90%. The aim is to allow companies to use their ship assets to secure additional liquidity.
Starting today, the Korea Ocean Business Corporation (KOBC) will provide guidance on its website and accept applications for the unsecured credit guarantee and other detailed support measures.
Minister Hwang Jong-woo of the Ministry of Oceans and Fisheries (MOF) said, "The government will provide all-around support so our shipping companies, hit hard by the Middle East war, do not suffer cash crunches," adding, "We will do our best to maintain export-import logistics networks and keep the national economy steady."
Ahn Byung-gil, president of the Korea Ocean Business Corporation (KOBC), said, "Management uncertainty in the shipping industry has surged recently due to the impact of the Middle East war," and added, "Through this support program, we will do our best to ease the liquidity crunch at our shipping companies facing temporary difficulties and to secure stability across the shipping industry."