South Korea will provide finance to small- and medium-sized domestic shipping companies
Financiers have provided funds to a mid-sized shipping company for secondhand LNG dual-fuel bulk carrier duo under a 20-year COA for Vale
Support provided not only for the purchase of the carriers but also for ship-operating leases and vessels’ green retrofitting
SOUTH Korea’s Korea Development Bank has helped Busan-based Wooyang Shipping to purchase two used, environmentally friendly, bulk carriers worth $121.5m through a ship financing scheme called the Korea Ship Innovation Programme.
The secondhand twins will be operated by Vale for 20 years under a COA. The vessels were built in 2020 and were previously operated by SK Shipping.
The $1.4bn KDB Smart Ocean Shipping Fund initiative was launched in April 2024 to help strengthen the competitiveness of small- and medium-sized shipping companies.
The initiative consists of four programmes: the Korea Ship Innovation Programme to support the purchase of ships, the Ship Operating Lease Programme for small- and medium-sized shipping companies, the Environmentally Friendly Ship Retrofit Programme and the Preferential Ship Programme for high-value shipping contracts.
To finance the vessels, the senior lenders, KDB and Kexim, and the junior lender, a fund called “The Smart Ocean Shipping 3”, entered into loan agreements with two special purpose companies for each of the two vessels.
The SPCs were established by the fund which was jointly set up by KDB Infrastructure Investment Asset Management, KDB and Kexim.
The ships were delivered with the ship financing injected to the SPCs. The SPCs then signed bare boat charter with hire purchase contracts with Wooyang Shipping.
Under the contract, which is conditional on the purchase of the vessels, the SPCs are the registered owners of the vessels as a first charge, but the vessels are owned by the shipping company at the end of the contract.
A Wooyang Shipping official told Lloyd’s List that the two vessels, which will be renamed Wooyang Moria and Wooyang Erebor, are twins, each of 325,000 dwt. The LNG dual-fuel bulk carriers will be in service from April.
Established in 1982, Wooyang Shipping specialises in bulk carriers and has contributed to the transport of products of major domestic exporters through long-standing co-operation with KDB.
In August 2024, the company leased an environmentally friendly bulk carrier Wooyang Ares (IMO: 9826433) with the support of the KDB SOS Fund worth $32m.
“Starting with the introduction of two ultra-large eco-friendly bulk carriers through the Korea Ship Innovation Programme, we plan to actively provide financial support for small- and medium-sized domestic shipping companies to make a bigger jump,” KDB said in a statement.
