해운기업의 경쟁력 강화를 위한 선박금융 활성화 방안에 관한 연구

Abstract

Korean domestic shipping companies are slowly recovering from the worst crisis in history. In addition to the adverse effects from the global financial crisis and sharp drop in cargo volume/freight level, shipping companies have struggled in 2009. But business is expected to turnaround this year. As the global economy gradually stabilized, it provides a window of opportunity which gives our companies the chance to regain global competitiveness. However, it is concerned that the domestic companies, unlike foreign companies, will miss out on a great opportunity. While foreign shipping companies have been actively expanding fleet with the help of government-backed rescue packages, domestic companies are lack of government support measures and are being held back by regulatory constraints such as 200% debt-ratio restriction, in particular.

Despite signs of recovery in the shipping industry, domestic shipping companies are unable to take aggressive steps since governments put more weight on the restructuring and regulations. It is pointed out that the government supports as much as companies’ own efforts are desperately needed in the industry. According to Lloyd’s List, a leading daily newspaper for the maritime industry, foreign shipping companies that had been badly hurt by the recession last year, are preparing to embark on aggressive moves with the help of an emergency aid of the government/financial institutions.

The world’s third biggest container shipper company, CMA-CGM, which was driven to the brink of bankruptcy last year, has recently taken delivery of several new buldings that could not be claimed from the shipyard previously. CMA CGM has received a lifeline worth $500 million from its creditors and emergency financial bailout from the government and has been expanding operating fleet.

Germany’s Hapag-Lloyds has joined the recovery as the government agreed on exceptional 2 billion loan guarantee. China’s COSCO, with capacity of approximately 560,000teu in 2009, also plans to increase its fleet by 60% by 2013.

Some shipping companies have started ordering new buildings. Taiwan’s Evergreen Line surprised everyone when it launched its mega plan to build 100 ships which include 32 vessels of 8,000 TEU capacity. Greek ship-owners, so called ‘Greek Tycoon’, have also been active and recently ordered more than 40 container ships.

In contrast, the domestic shipping industry is keeping low-profile because of ongoing restructuring program set by the government and other regulatory constraints such as 200% debt-ratio restriction.

Having signed a memorandum of understanding (MOU) with its creditors to improve its financial position in 2009, Hanjin Shipping is expected to record greatly improved 1st Quarter performance but the company has yet to make aggressive move. Despite of an operating profit of 11.6 billion won in the first quarter of the year, Hyundai Merchant Marine is being pressured to accept a debt restructuring program by its creditors because its debt-to-equity ratio went far beyond the cut off point of 200.

Should the government and financial institutions support shipping companies who had excessively expanded its fleet in the past market boom is an arguable issue. However, ahead of industry recovery, domestic shipping companies must avoid making some of the most terrible mistakes such as failing to seize a golden opportunity, or losing competitiveness. Domestic shipping companies cannot afford to lose its competitiveness under the restructuring trap.

Blind support from the government is hardly expected, but minimum and timely support within the framework of law/regulations is required, and companies also need to put intensive rescue efforts.

An shipping analyst said shipping companies operate on a business model unique to any other business that is debt-financed so applying the typical below-200 percent debt to equity ratio is inappropriate. As an increase in debt to equity ratio is unavoidable when securing vessels, and as such increase does not affect operations or cash flows, special consideration should be given to the industry, he said.

A senior official of the shipping industry said, “In order to ensure that Korea becomes one of the world’ top five marine powers, the government should provide environment to compete with foreign shipping companies, benefiting from the government support measures.” “In these circumstances, it seems that the global competitiveness of domestic shipping companies has no choice but to retreat”

Considering above circumstances, it is time for domestic shipping companies to secure vessels competitively through active international/domestic ship finance practices.