Lenders to offer W4 tril. in loans to ailing shipbuilders

Korea's state lenders and commercial banks will offer soft loans to local shipbuilding companies in a bid to lift their financial burdens spawned by a global slowdown, the financial regulator said Sunday.

The lenders will extend loans worth 4 trillion won ($3.52 billion) designed specifically to help the financially ailing sector starting next week, according to the Financial Services Commission (FSC).

The loans will be extended to firms that are suffering cash shortages due to delayed payments from their clients, it said.

The lending program came as local shipbuilders have been hit hard by global economic jitters. Orders won by major Korean shipbuilders halved in the first half of 2012 from a year earlier as global demand flagged in the wake of the eurozone debt crisis.

Orders from European clients accounted for some 58 percent of total orders won by the country's top three shipbuilders last year.

The state-run Korea Finance Corp.(KoFC) and Korea Development Bank (KDB) are set to take part in the loan program with five major commercial lenders including Kookmin Bank, according to the FSC. (Yonhap)