Lloyd's List is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call UK support at +44 (0)20 3377 3996 / APAC support at +65 6508 2430

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Evergreen and Yang Ming in talks over state-aid access

Two heavyweight Taiwanese carriers are said to be exploring the possibilities of tapping into the $1bn state-backed financing stimulus being offered to domestic shipping firms

A Taiwanese official says the state aid scheme will allow local shipping and port firms to gain access to extra financing — on top of their existing borrowing limits — from banks in Taiwan

EVERGREEN and Yang Ming have held talks with government officials about accessing a $T30bn ($1bn) state-aid package aimed to support the domestic shipping sector during the coronavirus outbreak.

Taiwan’s Ministry of Transportation and Communications said in a release that its officials had met the chairman of each company this week.

Evergreen’s Anchor Chang and Yang Ming’s Bronson Hsieh discussed the industry outlook as well as the financial rescue plan unveiled last month.

Under the plan, the government has pledged to provide guarantees of no less than 80% of the approved loans plus subsidies for interests.

That will allow local shipping and port firms to gain access to extra financing — on top of their existing borrowing limits — from banks in Taiwan, a ministry official told Lloyd’s List.

Shipping is part of the “economic lifeline of Taiwan” and the ministry will “do its utmost” to help the sector weather the difficult times, according to transport minister Lin Chia-lung.

“Companies must apply for the scheme before they can be assessed for the grants,” the official said. He added that there had been few applicants so far because shipping companies, including Evergreen and Yang Ming, were still trying to learn more details about the financial support.

The move comes as the shipping industry, especially container shipping, is reeling from the coronavirus backdrop. The expected contraction of box trade demand this year varies from 8% to 20% based on forecasts from different analysts.

Some countries have already started to offer help to their national carriers, as has been witnessed with the $1.1bn state-backed loans landed by CMA CGM and the $600m convertible bonds issued by HMM to policy lenders.

Both Evergreen and Yang Ming have said the measures could be “extremely helpful” to Taiwan’s shipping industry in strengthening their credit and replenishing their work capital amid the virus-led recession, according to the release.

The pair, respectively the world’s seventh- and eighth-largest container line shipping carriers, recorded a net loss of about $15m and $27m in the first quarter this year, although the Evergreen’s results did not consolidate the full container shipping business of its parent group.

Yang Ming, which is more than 45% state-owned, has already underscored government backing in a recent results announcement, saying its liquidity and refinancing risks remain low despite the impact from the coronavirus backdrop. It also approved a private offering plan earlier this month to raise more funds.

Related Content

Topics

UsernamePublicRestriction

Register

ID1131437

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel