Hyundai Merchant Marine Co. (HMM) announced on March 25 that it has signed a financial contract with Korea Shipping and Maritime Transportation Co. to build five 300,000-ton very large crude carriers (VLCCs).
The company signed a US$420 million (470 billion won) contract with Daewoo Shipbuilding & Marine Engineering Co. in September last year to build five VLCCs and it will raise money to build new ships through Korea Shipping and Maritime Transportation’s support program which is part of the government’s shipping support policies.
The financial support program worth US$420 million (470 billion won) consists of 60 percent of unsubordinated investment and 40 percent of subordinated investment. HMM participated in subordinated investment with 47 billion won (US$43.56 million), 10 percent of the total shipbuilding contracted price.
Unsubordinated investors include Korea Development Bank (KDB), Citibank, Bank of America and Standard Chartered Bank, while subordinated investors are the Export-Import Bank of Korea, Korea Asset Management Corp. and KDB Capital Corp. as well as HMM and KDB. The Korea Trade Insurance Corp. provides financial guarantees for unsubordinated investments.
The five VLCCs will be delivered to HMM, starting from the first half of 2019. HMM has already completed 190 billion won (US$176.09 million) worth of the long-term shipping contract for two out of the five for five years.