The government, on June 8, announced its plans to restructure shipping and shipbuilding industries and measures to recapitalize state-run banks to support the financing of the restructuring process.
For the shipping industry, the government will keep supporting Hyundai Merchant Marine to joint the Alliance, while supporting normalization and successful implementation of Hanjin Shipping’s self-rescue efforts.
The ‘Big Three’ shipbuilders – Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering – have prepared self-rescue plans in case of further slumps and economic downturn. The government will keep monitoring the progress of their restructuring efforts.
In order to secure sufficient capital for restructuring, the government and the Bank of Korea decided to recapitalize state-run banks. By the government’s estimates, the restructuring would require state-run banks including the Korea Development Bank and Export-Import Bank of Korea to raise additional 5 to 8 trillion won.
The government will directly inject 1trillion won to KEXIM; and the government and BOK will jointly create a ‘Recapitalization Fund’ of 11 trillion won. The fund will consist of 10 trillion won from the BOK and 1 trillion won from the Industrial Bank of Korea.
The government will also carry out intensive restructuring of state-run banks to prevent their moral hazard and reduce taxpayer’s burden in the process of recapitalization.
Please read the press release for further information