KDB to support maritime finance
By Chung Ah-young
The Korea Development Bank (KDB) said Monday it will support small and medium-sized shipping companies with a fund of up to $1 billion.
The state-run bank said that it will launch the “KDB Ocean Value-up Fund” within this year to sharpen the competitiveness of the local marine industry.
The fund is expected to help firms build new vessels and purchase used ones.
“But the details have not been decided yet as we are discussing them with the Financial Services Commission (FSC),” a KDB official said.
The bank is considering operating the fund through the Maritime Finance Center, which officially opened Monday under the wing of the Busan International Financial Center.
The Maritime Finance Center is operated in collaboration with KDB, Korea Export-Import Bank (Exim Bank) and the Korean Trade Insurance Corp (K-Sure) to provide loans to shipping firms and shipbuilders. A total of 77 officials from the three institutions will work for the center.
The fund is part of KDB’s reinforced policy financings ahead of a re-merger with the Korea Finance Corp. (KoFC) in January, which was spun off in 2009 as part of the previous government’s drive to privatize public institutions. The re-merger aims to coordinate relations between the institutions and strengthen the KDB’s role in supporting small and medium-sized enterprises (SMEs). KoFC served as a policy lender for SMEs.
The merging process will be completed by the end of this year and the integrated KDB will begin operations in January.
The bank will also provide funds for liquidity-strapped firms by taking over their convertible bonds through its fund programs to boost corporate growth.
Also, it will expand its project loans and investments to firms specializing in shipping and maritime plant technology.
KDB Financial Group Chairman Hong Ki-taek has taken part in various events in the Busan center since August to boost the maritime and shipbuilding industry.
Since the early 1990s, Korean banks entered into maritime finance and supported local ship owners. KDB has been active in ship financing along with Shinhan Bank.