Despite criticisms over underestimating troubled shipbuilder Sungdong Shipbuilding & Marine Engineering, the Export-Import Bank of Korea has pledged to provide up to KRW420 billion (USD357.7 million) in funding to the latter until 2019.
This year alone, the bank will provide KRW260 billion in funding. In August, KEXIM and Samsung Heavy Industries jointly agreed to help manage Sungdong to get it back on track.
KEXIM came under fire after lawmaker Park Won-suk criticised it for underestimating Sungdong’s performance for 2014. Park was speaking at a meeting of the National Assembly’s strategy and finance committee.
The bank forecasted Sungdong to incur a KRW264.5 billion loss for 2014. Instead, Sungdong had a KRW570 billion loss that year.
As at end-2014, Sungdong’s debt exceeded its assets by USD1 billion.
KEXIM’s continued support of Sungdong despite its virtual insolvency drew criticism from two other creditor banks, the Korea Trade Insurance Corporation and NH Bank, in May.
The bank is keeping its faith in Sungdong in the hope that a revival of product tanker orders will rejuvenate it.