Government Okays USD 1.2 bln for Korea Ocean Business Corporation

The government of South Korea decided to invest 1.35 trillion won (USD 1.2 billion) in Korea Ocean Business Corporation (KOBC). The compnay was created in order to help its shipping industry stand on its feet, especially after the bankruptcy of Hanjin Shipping.

Yonhap reported quoting the finance ministry that Cabinet approved a plan to contribute 12.7-percent stakes in each of the country's four port authorities to the KOBC.

Earlier this month, the corporation was officially launched in Busan, South Korea's maritime gateway on the southeastern coast, nearly one year after the government proposed setting up the agency. The agency's initial capital base is set at 3.1 trillion won.

The government also plans to invest 200 billion won in the agency. The government already has contributed 130 billion won in cash and has set aside 70 billion won from its next year’s budget for Korean Ocean Business. Private sector’s contribution of 1.55 trillion won will be made after conducting equity valuation.

According to Pulse, the Korean government has sought ways to restore the reputation of local shipping and shipbuilding industries struggling from the protracted global slump as well as the collapse of the country’s once leading container carrier Hanjin Shipping in 2016.

The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling in the face of an industry-wide slump and increased costs.

The nation's Big 3 shipyards -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. -- have been forced to undergo sweeping self-rescue programs worth some 11 trillion won since 2016.