Aju Business Daily

SEOUL -- South Korea's creditor-controlled shipping company, Hyundai Merchant Marine, signed contracts with three top shipbuilders to acquire 20 giant container ships as part of a government scheme to rehabilitate the domestic shipbuilding industry which has been put under painful restructuring.

Under a government-sponsored program to help domestic shipyards, South Korean shipping companies were required to place orders for 200 ships for five years. Hyundai Merchant will acquire 20 giant eco-friendly container ships by 2020 when new rules imposed by a U.N. maritime safety agency on the amount of sulfur take effect.

Hyundai Merchant said on Friday that 3.15 trillion won ($2.82 billion) would be spent on acquiring eight 15,000 TEU (twenty-foot equivalent unit) container ships from Hyundai Heavy Industries, seven 23,000 TEU ships from Daewoo Shipbuilding & Marine Engineering and five 23,000 TEU ships from Samsung Heavy Industries.

"The investment is designed to respond proactively to new environmental regulations and strengthen our global competitiveness through the acquisition of eco-friendly container ships," Hyundai Merchant said in a regulatory filing.

In February last year, Hanjin Shipping which used to be South Korea's top container carrier terminated its 40-year-long business and sold some of its assets to Hyundai Merchant.