TWO of Europe’s largest containership operators are heading for a showdown with Korea Eximbank over demands for extra money to cover the cost of newbuildings that were already financed, and are ready to be delivered.
Mediterranean Shipping Co and CMA CGM are said to be the companies most immediately caught up in the wrangle. But unless some solution is found, many others could find themselves in a similar position, say industry sources.
Korea Eximbank, which has financed the ships at the centre of the dispute, is applying strict loan-to-value terms and telling owners to provide more of their own equity to compensate for declining ship prices.
This is the problem with declining ship values. The banks don't want to be stuck with ships valued less than they are owed, which occurred this week due to the Eastwind Maritime Bankruptcy.
The Korean Ex-Im Bank is also hanging their hat on international guidelines.
Korea Eximbank’s ship financing director Hoseob Jeung said there had been no change of policy, and that loan covenants had always been based on market value.
Mr Jeung said that the bank was following Organisation for Economic Co-operation and Development guidelines, in line with other international banks.
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