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Korea Report - April 2006

Author : Hwang & Co Date : 06-05-11 13:04 Hit : 44923

Topics.

-Han Myeong-sook became first female PM.
-Hines Ward visited Korea waking up Koreans for discrimination on mixed race children.
-Territorial dispute rekindled between Korea and Japan on Dokdo Islet.
-NK asked Korea the additional aid of rice and fertilizer.
-USA called world’s attention to NK’s refugees.
-Prosecution stepped up the investigation into Lone Star to sell KEB.
-Dubai oil hit historical high overclouding Korean economy.
-Chairman Chung of Hyundai Motor arrested on embezzlement of company funds.
-Kwon strengthened to hit 8 years low.
-Shipbuilding steel price lowered.
-HHI became the biggest share holder of HMM.

GOVERNMENT AND POLICY

The National Assembly endorsed the appointment of Han Myeong-sook, 62, as Korea's first female prime minister. Han is a two-term lawmaker who served as minister of gender equality in 2001 and environment minister in 2003. Before entering politics, she was a renowned feminist activist and a pro-democracy fighter and was jailed for 2 years for her fight against the military dictatorship in the 1970s. Political parties accepted the first female prime minister, describing it as a symbol of the improved women’s standing in male dominating Korean society. Political circle found no major glitch in her ability to manage state affairs and her moral qualities during 2 days of parliamentary confirmation hearings. Her first task is to manage the May 31 local government elections, which are to elect hundreds of heads of local administrative offices and thousands of members of local assemblies.

Hines Ward, 31, born of a Korean mother and an African-American father, who won the USA Super Bowl’s MVP award this year, visited Korea with his mother. His mother took him to USA when he was a baby to escape the pervasive discrimination suffered by mixed race children here. The parents soon divorced and Ward was raised by his mother. During a luncheon in presidential residence, Ward reiterated that his existence totally depended on his mother’s devoted love, and President Roh responded, "I wonder whether Mr. Ward could have made such great success if he had grown up in Korea. I will make an environment where biracial children can also become successful here in Korea." He shed tears after receiving the citizenship certificate and a gold medal from Seoul Mayor.
Watching the sensation Ward made during his visit, the Ministry of Justice decided to ease regulations this year to grant citizenship and permanent resident rights to foreigners who are in de facto marriages with Koreans, and suggested to remove the term "mixed-blood" in legal documents because of its racial nuance in a country that puts high value on its homogeneity. Currently, 4 out of every 10 males in rural areas marry non-Korean Asian females. He promised to come back soon to establish a foundation of scholarship under his mother’s name.

The crew of a Korean fishing boat hijacked on March 15 by unidentified attackers in the sea off Somalia. 25 crewmen, including Indonesian, Vietnamese and Chinese sailors, led by 8 Koreans, aboard the 361-ton fishing boat. The Foreign Ministry immediately set up an emergency team to liaise with Dongwon Fisheries. Exact reasons behind the incident and the identity of the hijackers were not immediately known but officials here suspect the kidnappers were holding the crew and boat for ransom.

Lawmakers, even from the ruling Uri Party, called on the government to exercise greater caution in proceeding with the imminent FTA with USA, saying "The government should not push hastily for such an important trade deal without a public consensus." Seoul and Washington are set to hold the inaugural round of FTA negotiations on June 5 in Washington, aiming to conclude the talks by March 2007. The bilateral trade pact is a highly controversial issue in Korea with around 270 civic groups, including farmers' advocates, poised to commence a fierce campaign to derail the deal. Korea is seeking to exclude sensitive goods, such as agricultural products, or give special treatment in FTA talks, while USA insists that exceptions will weaken the effectiveness of FTA.
As many as 10,000 Koreans will likely be hired as nurses in US hospitals over the next 5 years, as US government encourages its hospitals to import foreign nurses to fill a shortage for about 300,000 nurses. In New York alone, about 30,000 nurses are believed to be needed right now. There are currently around 6,000 SKorean nurses working in the last 4 years.

Korea has raised the stakes in a new territorial dispute with Japan, triggered by Tokyo's announcement to conduct a maritime survey in the waters around the Dokdo islets. Foreign Minister expressed serious regret and pledged to take stern action if Japan goes ahead with the plan, which the Korean government regards as a violation of its territorial waters, dealing with it in accordance with international and domestic laws. The area includes waters near Dokdo, a chain of rocky islands in the East Sea which is at the center of territorial dispute between 2 countries. The Korean claims the area concerned comes within Korea's EEZ while Tokyo says the area is within Japan's EEZ. Amid rising tensions, the Korean coast guard has stepped up security in the East Sea, dispatching 18 patrol boats, and a surveillance plane was ready for deployment. Following the truce reached between vice ministerial level talks, Tokyo proposed to postpone till June the maritime survey and 2 Japanese ships delegated with the mission headed back home. President Roh Moo-hyun has issued a strong warning to Japan that Korea will no longer tolerate provocations by Japan regarding the islets of Dokdo, saying "This is a matter where no compromise or surrender is possible. We will continue to muster every measure of our national strength and diplomatic resources until the day when the Japanese government remedies these wrongdoings."

NORTH KOREA AND NATIONAL DEFENSE

SKorea will reduce its armed forces from 680,000 to 500,000 by 2020, but its integrated war capability including naval and aerial forces will be able to deter any possible attacks by NK. The North's ground forces are estimated to exceed 1 mil.

NK could suspend food rations for ordinary citizens in Pyongyang next month due to its worsening famine. Pyongyang's residents received relatively steady food supplies in 2004, but rations came to a halt for almost half a year in spring and summer last year. The aid group to NK said big businesses and state organizations would remain unaffected but warned that if food rations are halted for months, a growing number of NKoreans will migrate to China in search of food. NK has relied on outside aids to feed its 23 mil population, but abruptly refused the assistance from the World Food Program last year and has not been receiving food and humanitarian aid from the relief agency since late last year.

Upon NK’s request to resume the talks with the South, almost a month after it unilaterally pulled out of the scheduled negotiations over joint USA-SKorean military drills, the 18th round of ministerial talks were held in NK’s capital Pyongyang from April 21-24. NK reluctantly agreed to resolve the sensitive issue of SKorean civilians, believed to be held in NK, as part of its eight-point agreement with the South that also referred to international efforts to resolve a dispute over the North's nuclear weapons program. The North has never admitted to holding any SKorean in the country and claims the only SKoreans there have defected voluntarily. The agreement followed the repeated calls by Seoul for the release of nearly 600 SKorean prisoners of war held during the 1950-53 Korean War and 485 civilians believed to have been kidnapped by NK since the war ended. Seoul proposed a "bold" economic assistance to the impoverished North, should it agree to resolve the decades-old issue. It was the first time for SKorean government to refer publicly to the civilians as "abductees”. With no link to Seoul's calls for the release of SKoreans held in NK, the North had requested the South provide half a mil tons of rice and 300,000 tons of fertilizer as part of its annual humanitarian aid for the North. The South has agreed to provide 200,000 tons of fertilizer with an additional 100,000 tons to be available upon future consideration. The fertilizer aid comes in addition to 150,000 tons SKorea already provided earlier in the year. No agreement was reached on the North's request for rice at the talks.

President Bush administration continued to call the world's attention to the plight of NKorean refugees and help them with a very high priority. Up to 300,000 NKoreans are believed to be hiding in China to seek asylum from NK. At talks with Chinese leader Hu Jintao in Washington, President Bush called on Pyongyang's ally to live up to its international obligations on handling these refugees. President Bush met families of NKorean defectors and kidnap victims at the White House, timed to coincide with the end of NK Freedom Week in Washington, organized by human rights groups.
Korea and USA agreed to upgrade the level of negotiators for the final round of discussions to expedite a resolution on cleaning up contamination at US bases in Korea. Seoul and Washington have clashed on how to split the cost for the clean up of 56 US bases that will be returned to Korean ownership by 2011. If strict rule made by Korea is adopted, the decontamination cost is estimated up to $500 bil. However, USA declared not to accept responsibility for any alleged contamination beyond the criteria of "known, imminent and substantial endangerment" to human health as defined in the memorandum. Following the principle, US military will remove only the polluted fuel tanks inside the bases concerned, which would cost them some $2 mil.

NK has reportedly permitted APTN, the TV arm of the Associated Press, to open a local office in Pyongyang, after having been ongoing for about 8 years. If established, it will be the first ever full-time Western news bureau in the secretive nation.

ECONOMY AND POLICY

KDI raised its forecast of Korean economic growth to 5.3% this year, up 0.3% from its previous prediction, thanks to ongoing rebound in consumer spending to nearly 5% this year. IMF forecasted 4.5% economic growth for Korea next year, compared to the 5.5% this year.

Korea’s exports rose 12.7% in April on year on high demand for refined oil products, general machinery, auto parts and ships. Shipments totaled $25.8 bil, maintaining double-digit growth for the third straight month. Korea chalked up a $1.2 bil trade surplus with USA in Feb, with $3.3 bil in exports, less than a $1.9 bil surplus recorded for Jan.
The country's surplus in goods trade in the first quarter of the year touched $5.23 bil, but the service trade deficit hit $5 bil, wiping out the surplus in the trade of goods. Experts fear that the service trade deficit will continue to widen this year to surpass $20 bil. With the high-flying oil prices, the goods trade surplus would eroded by the increasing outflow of domestic funds for overseas trips and educational purposes. The BOK recently lowered its current account surplus forecast for the year to $10 bil from $16 bil.
The earnings of domestic exporters have been slipping for 6 consecutive quarters from fourth quarter of 2004 with a strengthened KWon against USDollar. Exports account for about 40% of the national economy. The local currency has gained 7.7% this year, and KWon reached 936.70 to USDollar, its highest since Oct 1997.
As of late March, local investors had invested KW6.59 tril in foreign assets through funds. They also invested KW7.96 tril in offshore funds managed by foreign counterparts.

The prosecution, tax and financial authorities are stepping up their investigation into the US investment company Lone Star Funds, over allegations about tax evasion, an illegal transfer of $8.6 mil to overseas and irregularities in its acquisition of Korea Exchange Bank. Lone Star spent KW1.38 tril on the sale in 2003, and their stake was later valued at more than KW6 tril, raising suspicion and public resentment over the process of the purchase. As Koreans have been irked by the size of the profits it rack up, public uproar occurred when Lone Star said it does not have to pay Korean taxes on the sale of KEB because the deal was conducted through a subsidiary in Belgium. Korea has a tax treaty with Belgium which prevents paying double taxes in both countries on the same deal. Lone Star recently chose Kookmin Bank, the nation's largest lender, to buy its whole stake of KEB at about KW6.4 tril, hopefully before July.
Prosecutors arrested the head of Elliot Holdings, who allegedly bribed government and KEB officials while helping Lone Star to acquire KEB at a giveaway price. The prosecution is focusing its investigation on whether or not there was an "illegal connection" between KEB and Lone Star, and Lone Star to the government's financial regulator. Total 30 people connected to Lone Star's purchase of KEB are not allowed to leave the country.
The Board of Audit and Inspection summoned Deputy Finance Minister and 2 other key figures involved in the 2003 sale of KEB. They were questioned over whether they made any wrongdoings or misjudgments during the sale process. In 2003, the capital ratio of the bank was estimated at 10% when it was reported to the bank's board of directors. Later the figure was changed to 6.16% when it was reported to the Financial Supervisory Service. BAI has secured evidence that an official of the FSS received a five-page "suspicious fax" from KEB, and that a former FSS executive pressured him to falsify the financial reports to facilitate a quick sale of the bank to Lone Star. The BAI cross-examines a number of key figures, to determine whether the bank's capital adequacy ratio was actually manipulated to facilitate the sale. Irregularities in the financial measurement appear to have helped make the bank appear to be a potentially insolvent institution, enabling Lone Star to buy KEB. The BAI tentatively concluded that the BIS ratio was actually around 8%.
Lone Star's founder and Chairman John Grayken and Vice Chairman Ellis Short visited Seoul and said the fund will follow the laws of the country and cooperate with the Korean government, but said "6.2% BIS ratio was inadequate. Additional provision was needed to save credit card subsidiary. Without capital injection, the BIS ratio could fall to 4.4%," stressing that the KEB was in a dire condition and capital injection from Lone Star was desperately needed. He confirmed that Lone Star plans to offer the country KW100 bil as a social contribution. The government and prosecution said that the investigation on Lone Star Funds will not be deterred by its decision to donate KW100 bil.
Kookmin Bank, the preferred bidder to acquire a controlling stake in KEB said any takeover plan will be delayed until prosecutors complete an ongoing probe into Lone Star Funds' buyout of KEB in 2003. They do not rule out the possibility that the deal could collapse if the sale of KEB to Lone Star 3 years ago is nullified
The National Assembly has pushed to enact a law, effective in July, which will require foreign investors to pay off withholding taxes, even on deals in countries that have the double-taxation treaty with Korea.

The National Tax Service has begun an inquiry into whether foreign-invested companies in Korea are profiting from "excessive" tax benefits, targeting 4,889 companies in which foreign investors own more than a 50% stake as of the end of 2004. The agency conducts an investigation into US equity fund Newbridge Capital over the sale of its stake in Korea First Bank in 2005 with the estimated gain of more than KW1 tril from the sale to Standard Chartered Plc. But Newbridge asserts that it is not obliged to pay taxes to Korean authorities under a USA-Korea accord dealing with the avoidance of double taxation. The tax authority is conducting a probe into Lone Star, who is expected to gain more than KW4 tril from selling its stake in KEB and is likely to pay a small amount of tax on its profit. French retailer Carrefour SA is also likely to pay low taxes on profit expected from the entire sale of its Korean operations.

The price of Korea's mainstay Dubai crude surged to $65.7 per barrel, a new record high, on April 20, on growing concerns on supplies from Iran and US gasoline inventories fall. An energy economy institute predicted that Korea’s economic growth rate will drop by 0.37%, decreasing the country’s current account surplus by $510 mil and rise consumer prices by 0.09% if the average price of Dubai oil reaches $60 per barrel this year. The government is to increase the emergency oil reserves to 123.5 mil barrels from 116 mil barrels by the year's end. Korea, the world’s fourth-biggest crude oil buyer, has reached an initial pact with Algeria on tripling joint oil stockpiling to 6 mil barrels this year, aimed at helping Korea secure wider sources of crude supply and reduce its reliance on the Mid East. The Korean government has planned to increase joint oil stockpiling with foreign firms by 5 mil barrels to a total 25 mil barrels this year.

Korea’s financial holding companies saw their 2005 earnings surge more than 50% from a year ago on strong result of their affiliates. Shinhan Financial Group, Woori Finance Holdings and Korea Investment Holdings had a combined KW3.65 tril in consolidated net profits, up 51.5% on year.
Local card issuers are expected good earnings for the first quarter this year, on the back of higher consumer spending and a lower delinquency ratio. Hyundai Card, which posted KW5.2 bil of net profit in the first quarter last year, is expected see the figure go up by 4 times this year, Samsung Card forecasts over KW70 bil of first quarterly profit, Lotte Card a net income of KW44 bil, Shinhan Card KW16 bil-KW17 bil and LG Card KW293.3 bil.

CHAEBOL

The Fair Trade Commission announced that the shareholding cap would be imposed on 5 conglomerates - Samsung, Lotte, CJ, Daelim and Hite. The regulations, which came into effect 4 years ago, prohibit affiliates of groups with over KW6 tril in total assets from investing more than a quarter of their equity in other companies, aiming to prevent excessive circulatory stockholding among the affiliates of chaebols, improve their ownership structure and enhance corporate governance systems. Meanwhile, under the new revisions to the regulations, the commission released its grip on several large firms which do not have any specific controlling shareholder, such as KT Corp, Korea Railroad Corp, Korea Electric Power Corp and POSCO. In a further softening of the shareholding cap on big firms, regulators will not apply the investment ceiling when corporations acquire firms under the government's bailout program.

Samsung Group has extended its sports sponsorship from the Olympic and Asian Games to various other activities, hoping that support for those world sports will enhance its corporate image. The Group sponsors the world's most prestigious equestrian event; the Samsung Super League, the Samsung Running Festival and the Samsung World Championship woman's golf tournament. The company has supported the Nations Cup, the world's oldest and most prestigious equestrian competition, since 1996. And the Samsung Super League was derived from the Nations Cup, which began in 1909 when a contest for military officers was held in London.
Samsung Electronics (SEC) reported a higher-than-expected increase in first-quarter profit as sales of TV rose before the soccer World Cup in June. Net income climbed 26% on year to KW1.9 tril. SEC, the world's largest maker of liquid crystal displays, posting a revenue of $3.34 bil from its LCD business. The sales of large panels reached $2.86 bil, recording 12.4 million units. Samsung posted a revenue of $1.19 bil in its flat panel displays in March, extending its leadership for 3 straight months.
Samsung SDI, the world’s largest plasma display panel manufacturer, plans to spend KW730 bil to build a new production line to meet the increasing demand for the large flat panels in USA. The company’s fourth PDP production line will be built within its production complex in Ulsan with an annual capacity of 3 mil PDPs for 42-inch screens, starting mass-production in May next year.

Hyundai Motor (HMC), the nation's largest automaker and the second largest conglomerate, is accused of raising billions of KWon in clandestine funds to lobby government officials and politicians for business favors.
The prosecution officials last month raided Glovis, Hyundai Autonet and 5 other affiliates related to the HMC Group as part of investigations into business deals which allegedly helped to accumulate huge slush funds and transfer management control from Chairman Chung Mong-koo to Chung Eui-son, 35, his only son. For the past 6 years, the group has increased its affiliates from 8 to more than 40. In the process, the prosecution suspects that the group lobbied authorities to buy companies at low prices, misappropriated funds and illegally handed over significant stakes in the group to the son.
Chairman Chung's firm control of the entire group is founded on circulatory share ownership among major affiliates - HMC, Kia Motors and Hyundai Mobis. Hyundai Mobis holds a 14.59% in HMC, which in turn secures a 38.67% stake in Kia Motors. Kia has a 18.19% stake in Hynundai Mobis, forming a chain of stake ownership among affiliates. Chairman Chung holds a 7.9% in Hyundai Mobis and 5.2% in HMC, exercising absolute influence over the group. Eui-sun has less than a 0.01% stake in HMC. Instead, he has amassed the shares to 1.99% in Kia in recent months. Eui-sun has a 31.88% stake in Glovis, and previously secured cash to buy Kia shares by selling out his Glovis stake. Under this ownership structure, control of one major subsidiary gives the holder control of the whole group. The group's major subsidiaries are suspected of awarding lucrative deals to companies controlled by Eui-sun, who used the profits to increase stakes in major group affiliates.
HMC Group announced its chairman and his son will offer their Glovis shares, worth KW1 tril as a social contribution to atone for the automaker's involvement in ongoing scandals. HMC feared that if the investigation was protracted, its brand image in overseas markets would suffer serious damage because it only recently began to build a better reputation as a quality automaker in USA and in the world. Chung's ambition to make his company one of the world's five-largest automakers by 2010 is also confronting a fatal challenge. HMC delayed its plan to hold groundbreaking ceremony on May 17 in the Czech Republic and Kia indefinitely postponed a plan to begin construction of a factory in the state of Georgia in USA. In contrast to the nation's largest business group Samsung, which is known for a relatively systematic business operation, HMC's decision-making process is largely controlled by chairman Chung alone. The donation of shares will push the Hyundai family to a dead end in their succession plan.
The prosecution has obtained evidence backing the allegation that HMC Group attempted to bribe government and bank officials in 2001 to have its affiliates' bad debts written off. They arrested 2 former and current top officials of the state-run Korea Development Bank as part of their investigation into a bribery scandal. They are suspected of having received a bribery in return for writing off the debts of Hyundai affiliates. The prosecution finally decided to arrest Chairman Chung on charges of embezzling company funds over KW300 bil and creating slush funds over KW100 bil, and said it will continue to investigate the chairman's son but will not detain him, after considering the difficulties in HMC's business and burdens of detaining both father and son.

Hynix Semiconductor, the world’s second-largest memory chip manufacturer, said that its joint venture in China has begun test operation, a year after completing construction of its first plant in one of the world’s largest markets. In 2004, Hynix formed a joint venture with French chipmaker ST Microelectronics, and launched the construction of the plant in Wuxi in April last year. The plant, with a monthly production capacity of 20,000 wafers, will go into mass production of 200 millimeter wafers later in June.
Hynix is to appeal against a US federal court decision finding it guilty of violating 10 patents of US high-tech firm Rambus. The US federal court in San Jose ordered Hynix to pay $306.5 mil in damages to Rambus. Hynix said its appeal would focus on "whether or not Rambus violated antitrust laws in acquiring and enforcing these patents" then " seek to have all of the Rambus patents in dispute held unenforceable". Rambus' claim that Hynix infringed patents covering fundamental aspects of DRAM. The verdict is the first jury test of Rambus' infringement claims to press similar cases against SEC, Micron Technology and Nanya Technology.

LG Telecom, the country's No 3 wireless operator, reported revenue of KW722.4 bil a 14.9% rise in first quarter on year, operating profit of KW106.3 bil and net income of KW105.4 bil, citing a continuous increase in customers and strong growth in its wireless data service.
LG.Philips LCD completed the world's largest liquid crystal display plant in Paju to produce large seventh-generation LCD panels at an increasing monthly capacity of 45,000 panels by June and 90,000 panels by the end of this year, after investing a total of KW5.3 tril by the end of this year. It holds a global market share for large-size LCD panels more than 20% in 2005, becoming the world's second-largest LCD panel maker.

Carrefour's Korean unit became a target for the country's tax authority as the French retailer announced the sale of its local operations to E Land Group for KW1.75 tril. The initial investment of the retailer was KW800-900 bil. The National Tax Service began an inquiry into whether it would be able to tax the local unit on the profit made from the sale, as foreign-invested firms have been condemned for hoarding tax-free profits made from selling distressed assets bought after the financial crisis of 1997-98.

MONETARY AND ECONOMIC INDICES

Korea Stock Price Index has been firm, keeping 1400 point as unbreakable basis. It has started the month from 1359, soared upto 1452, the highest in its history and ended month at 1419. The market has been encouraged by foreign investers buying spree, rumor on POSCO’s M&A and news on SEC’s purchase of own shares, overcome skyrocketing oil prices and strengthened KWon. Kwon has demonstrated its muscle through the month, starting from 976, went down to 939, the strongest in more than 8 years, reflecting the global weakness of USDollar and ended the month at 943 againt USDollar. KWon has climbed more than 7% against USDollar so far this year, and a possible revaluation of the Chinese yuan should push KWon further. The government had planned this year's economic operations based on the average estimate of 1,010 won per dollar. The average won/yen rate sharply fell to 808 in Feb this year compared to 930 last year and 1,060 in 2004, pushing exporters competing with Japanese rivals to the bluff. The nation's daily foreign currency trading hit a record high in the first quarter, averaging $10.05 bil up 23.3% on year. Korea’s foreign exchange reserves rose to $222.89 bil at the end of April, up $55.5 bil from the March.
Korea’s jobless rate fell 0.2% in March on year to come in at 3.9% as a recovery in the local service sector spurs corporate hiring.
The Bank of Korea kept its benchmark interest rate unchanged at a three-year high, hinting at the possibility of additional rate increases in the coming months. BOK left the benchmark overnight call rate at 4% for April. The yield on 3 years corporate bond moved in the box of 5.25-5.31-5.33-5.19-5.08%. through the month.

SHIPBUILDING AND SHIPPING

Korean shipbuilders concluded the negotiation with Japanese steel mills to fix the price of thick plates at $580 per ton for the next 6 month from April, lowering $100 from previous half year. 900,000 tons of thick plates will be imported from Japan. POSCO decided to cut the price of steel plates for shipbuilding from KW650,000 per ton to KW620,000 next month, following a price cut by Japanese steelmakers.
3 Korean major shipbuilders are expected to win a total $10 bil in orders by the end of this month to build 44 LNG carriers for a gas project in Qatar, aiming to transport 15.6 mil tons of LNG from Qatar to Exxon Mobil’s terminal in the USA. DSME, SHI and HHI won orders for a combined 34 LNG carriers between June 2004 and last month and are expected to win orders for 10 more vessels soon.

HHI received the order from ARAMCO to construct a gas turbine electric power plant in Shayba, worth $170 mil, for the completion by July 2008. HHI got the order from Zodiac Maritime to build 4 x 8,600 TEU container ships, Phoenix Energy Navigation 2 x 105K PC, Dynacom 2 x 318K VLCC and Alpha Tankers 3 x 318K VLCC. HMD won the order from Gulf Energy Maritime for 4+4 x 75K coated tanker, as the company's first panamax deal, Conti Reederei 6 x 37K PC and CIDO 7 x 47K PC
DSEC, DSME’s integrated engineering subsidiary, signed the deal with US NASSCO to supply the design, drawings and shipbuilding material for 9 x 49K PC until 2012. Total contract is known around $260 mil. When 5 options are declared, the amount will be increased to $400 mil. DSME contracted with Tanker Pacific for 3 x 320K VLCC and Qatar Liquified Gas 3 x 150K cbm LNG.
SHI got the order from Danaos for 4 x 4300 teu container ship and STX signed the contract with MISC for 4 x chemical carrier. Hanjin got the order from STX Pan Ocean for 1 x LNG carrier and Maersk 4 x 3100 TEU. Sungdong secured order from Dynacom Tankers for 2+2 x 75K PC and Restis Group 8 x 170K bulker. INP had from Sekwang Shipping for 4+4 x 20K IMO II/III high spec chemical tankers, Lauritzen Kosan 2 x 8K semi-pressurised ethylene carriers and Eitzen Chemical 3 x 8K Chemical.
Samho got the order from Uyeno Transtech/Kyowa Sansho for 1 x 12.4K PC

HHI and its affiliate Hyundai Samho bought a 26.68% stake in its largest customer HMM, mostly from Norway's Geveran Trading. HHI said that the investment will shut off the possibility of hostile M&A attempts against the shipper and bolster a win-win relationship by expanding its domestic demand. But HMM is unease as fears mount that its cash-cow shipping company could fall into the hands of HHI Group without any notice to them, who posed as a white knight to protect HMM from possible hostile takeover attempts from foreign investors. HMM is on the alert as the current situation resembles a tug-of-war that took place 2 years ago with Kumgang Korea Chemical, led by Chung Sang-young, brother of Hyundai Group founder Chung Ju-young, had snapped up shares in Hyundai Elevator, the group's de facto holding company, citing "protection against foreign investors".
Without any knowledge of HHI’s movement, Hyundai Group took the protective measures against possible foreign takeovers by strengthening the cross-ownership between its subsidiaries. Hyundai Elevator recently decided to increase its stake in HMM to 20.16%, as a defence against John Fredriksen, whose Geveran Trading is HMM’s next-biggest shareholder, holding 15.8% stake. Hyundai Elevator bought 3% stake in HMM for KW46.2 bil from Hong Kong-based Cape Fortune.