SEOUL, KOREA - Korea's shipping companies, which have grown in tandem with the growth of the Korean economy, have fallen into a crisis due to heavy debts. The shipping companies, which are now in financial doldrums along with the sluggish shipping market worldwide, cannot afford to place orders for new ships.
Although now is a good time for them to place new ship orders as new-building prices remain low, they are bound hand and foot. They are now struggling to repay corporate bonds maturing soon.
Korea's top three shipping companies, i.e., Hanjin Shipping, Hyundai Merchant Marine, and STX Pan Ocean, turned out to have ordered no ships during the period from last year to now.
They need new ships to explore new routes and to maintain competitiveness. To prepare themselves for a turnaround of the market, they should place new orders for new ships now which will be delivered in two or three years later.
The amount of corporate bonds coming due is 250 billion won for Hanjin Shipping, 280 billion won for Hyundai Merchant Marine, and 200 billion won for STX Pan Ocean.
