Banks cut maturity on loans to Samsung Heavy

[THE INVESTOR] KB Kookmin Bank shortened the maturity on short term loans to Samsung Heavy Industries on June 15.

In giving the shipbuilder an extension on 1-year maturity loans, the bank cut the payback period to three months. Samsung Heavy’s loan from KB Kookmin is 100 billion won ($85.2 million).

The move is thought to reflect the difficulties the shipbuilder has been facing as orders dry up for some of Korea’s largest shipyards. 

Shinhan Bank is also reported to be considering taking similar measures on the 150 billion won loan Samsung Heavy took out a year ago on June 17.

Other local banks including NongHyup Bank and Korea Development Bank are also expected to follow suit. The shipbuilder’s 160 billion won loan from NongHyup and the 360 billion won loan from KDB are set to mature next month.

In total, Samsung Heavy has 2.9 trillion won in short term loans that will mature by March 2017.

By Choi He-suk (cheesuk@heraldcorp.com)