Creditors eager to revive Jinse

Three non-life insurance companies which are creditors of Jinse Shipbuilding of South Korea are requesting another creditor banks to delay collecting debts but the banks are refusing to do so.

Meritz Fire & Marine Insurance, Heungkuk Fire & Marine Insurance and Hanwha Non-life Insurance has recently sent an official document to Jinse’s creditor banks including Kookmin Bank and Korea Export Insurance Corporation to request postponement of collecting loans from Jinse until the end of next year. The insurers are said to have underlined Jinse’s technological expertise in shipbuilding and they plan to inject new fund into the shipbuilder to continue construction of ships. They expect to retrieve up to $230m when the ships on the orderbook are constructed and delivered to the owners.

But if the insurers’ efforts collapse, Jinse would have no choice but to go into court receivership or sell assets. Creditor banks, however, which have majority claims at the shipbuilder, are showing negative responses. The three insurers’ credit share stands at just 31.5%.

An official at one of the banks said, “The insurers have no future plans after the ships for which they have provided refund guarantees (RG) are completed. And even if new fund is injected and construction of ships goes on, reduced RG losses should be equally distributed among all creditors as joint profits.”