South Korea is to turn its ship finance fund, Korea Ocean Business Corp (KOBC), into a major shipowner to combat vessel shortages and spiralling rates.
The Ministry of Oceans and Fisheries is eyeing a change in strategy for the company, formed in 2018 to provide newbuilding backing for domestic owners.
A budget of KRW 100bn ($92m) has already been earmarked for sale-and-leaseback deals.
In 2021, KOBC will buy 10 ships of unspecified types. The emphasis is likely to be on container tonnage as space runs short and Asia to US rates spikes as demand recovers from the Covid-19 slump.
By 2025, it is planned to have 50 vessels under ownership, as well as the establishment of a specialised leasing subsidiary to attract private investors, Business Korea reported.
Previous leaseback plan
A sale-and-leaseback plan for KOBC was first mooted in 2018.
Domestic owners including Daebo International Shipping, Dong-A Tanker and DM Shipping were being lined up for deals involving 10 ships worth KRW 74bn (then $66.2m), the Yonhap news agency reported at the time.
It is unclear whether these deals went ahead.
KOBC said a survey that year found 19 domestic shipowners were interested in sale-and-leaseback deals for a total of 56 vessels.
The fund was formed to support orders for new ships in the form of investments or guaranteeing ship purchase programmes.
KOBC also provides consulting on shipbuilding investments and creating shipping indices, including a forward freight agreement derivatives market, to help diversify financial risks.
In April, TradeWinds reported that KOBC and state lender Korea Development Bank were to spend KRW 470bn to repay maturing debts of domestic boxship and VLCC company HMM.
