Shipping industry stock listing requirements eased

The Prerequisites to be listed on the stock market will be lessened for the shipping industry. The Ministry of Maritime Affairs and Fisheries revealed that revised regulations for companies in the shipping industry to be listed on the stock market will become effective May 21, pending consideration and resolution from the Financial Supervisory Commission on May 18. Current regulations for stock market listings provide that to list a company on the stock market where there are currently less than five listed companies in that industry, the company must have a debt to asset ratio lower than 1.5 times the average of those listed companies.

For a long time it has been impossible for companies in the shipping industry to go public as due to the nature of the industry, companies necessarily have large amounts of debt. Prior to 2000, the average debt ratio for listed corporations was 140 percent, while over-seas going shipping companies recorded 848 percent on average.

After regulations are revised, if a company? debt ratio surpasses the average debt ratio of all companies listed on the stock market, then in order to be listed, the number of listed companies in its industry must be below 5, and its debt ratio must be less than 1.5times that of the listed companies in its industry.

This will make it easier for companies in heavily debt independent industries to be listed.

For ocean-going companies, at present, Hanjin Shipping, Hyundai Merchant Marine and Korea line are listed. These three companies showed an average debt ratio of 774 percent. So if a shipping company has a debt ratio of 1,100 percent, 1.5 times that of these three shipping companies, and wants to be listed on the stock market, they will be able to do it.

This will empower shipping companies with the ability to raise capital through the stock market.