Hyundai Merchant Marine (HMM) signed a consortium agreement in Seoul on Tuesday with two smaller intra-Asia carriers - Sinokor Merchant Marine Co
. and Heung-A Shipping Co
. - Korea's Yonhap News Agency
The consortium was first announced in January
, when HMM said the agreement would allow it to acquire competitiveness against large carriers.
"HMM will have a full access on Heung-A and Sinokor's networks, which focus on Korea-Japan, Korea-China or Korea-South East/West Asia trades," a spokeswoman said.
Meanwhile, HMM said in a press release that it expects that support from the Korean government “will enable HMM to order new vessels and acquire more terminals, which will eventually lead to improvement in long-term cost structure and earning power.”
Since the Korean government announced a $5.73 billion subsidy program to boost the competitiveness of the shipping industry, HMM said the Korea Development Bank has played a key role to establish ‘Korea Shipping,” which it said will act as a shipping bank with a pot of $881 million.
HMM said it expects Korea Shipping to provide it with $661 million in funds in early March by buying vessels from HMM and leasing them back “at a reasonable price, which will help HMM to strengthen its freight competitiveness.”
HMM also said a new shipbuilding financing program, Global Shipping Fund, will be introduced in the first half of this year. It will support HMM in ordering newly designed vessels and acquiring terminals or port equipment.