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SOUTH Korea,
the biggest shipbuilding nation, will ease ship-fund
regulations as it competes with Singapore to become an
Asian hub for vessel financing.
Funds
will be able to own an unlimited number of ships,
compared with just one now, and also be able to own oil
rigs, the Ministry of Maritime Affairs and Fisheries
said in a statement on November 23 in Seoul.
Under
the changes, due to come into effect as early as next
month, the maturity of funds will also fall to three
years from five years.
The rule
change may help the country compete with Singapore,
which has introduced a series of incentives in bid to
attract shipping funds.
A total
of 3.42 trillion won ($3.7 billion) has been raised by
South Korean shipping trusts since they were first
introduced in January 2004, financing the acquisition of
68 new and second-hand vessels.
“We are
hoping the rule revisions will help provide more
flexible financing for shipowners and stable means of
investment for the general public,” the ministry said in
the statement.
South Korea
originally allowed yards to set up financing companies
to help shipping lines buy new vessels.
The
funds are traded on the stock market and pay dividends
to investors from fees received from shipping lines
operating the vessels.
Investors who buy into the funds also get tax breaks
until the end of 2008.
Hyundai
Heavy Industries Co., Daewoo Shipbuilding & Marine
Engineering Co., Samsung Heavy Industries Co. and other
South Korean shipbuilders have formed ventures for funds
with local and overseas financing companies.
A.P.
Moeller-Maersk A/S and other shipping lines spent a
record $155.7 billion on new orders in the first 10
months of this year to meet increasing demand from the
US and China.
About 90
percent of global trade is moved by sea. (Bloomberg) |
