K-sure Signs MOU with NEXI of Japan

Paving the way for joint financial support to firms from each country in overseas operations

Korea Trade Insurance Corp.(K-sure) signed a reinsurance cooperative agreement with Nippon Export and Investment Insurance Co.(NEXI) involving joint financial support to overseas projects of firms from Korea and Japan at NEXI Headquarters building in Tokyo Japan.
President Cho Kye-ryoong of K-sure and President Suzuki Takashi of NEXI signed for their respective companies on Oct. 5 amid the rising need for mutual support among nations in extending financial support such as project financing to large plant construction projects and social infrastructure project orders in many regions in the world including Libya, MENA, and Central Asia with the fear for double dip spreading fast due to the down grade of U.S. sovereign rating and the EU debt crisis.
Through the agreement reached at working-level talks, the both countries would be able to secure more joint orders by sharing risks by closely cooperating each other from the early stages of securing projects by setting up a joint channel for information sharing and join financing.
The agreement includes provisions that call for vitalizing reinsurance in both countries and expand information sharing and setting up a working group. A the working group talks this time, the subjects discussed included the down grade of the U.S. credit rating, and changes in global export environment and the reform of Basle agreement by OECD to the extent that the impacts from these developments would be minimal for each country through close cooperation.
K-sure President Cho said the need for close cooperation among overseas trade insurance entities has been growing greater as the global project market has been growing bigger in scale and multinational with one company taking charge of wide-range of responsibility from design, procurement and to construction. He said we should expand cooperative relations with advanced ECA organizations so that our construction firms would be able to expand their market share in the global project market, Cho said.
K-sure, in the meantime, said it will extend $1.8 billion worth of its insurance coverage to Samsung Engineering's Bahrain steel plant project with the annual production of 600,000 tons of steel to be built in the Hidd Industrial Region, some 14 km Manama. K-sure guarantee the repayment of the loan that Samsung Engineering got from BNP Parisbas Bank during its 10-year maturity.
Samsung Engineering got the loan from the French bank on guarantees from Euler-Hermes and Swiss Serv amounting to $1.1 billion and $800 million respectively.
K-sure officials said the plant project market has been growing ever larger in scale and multinational to have the need for close cooperation among trade insurance companies among different countries becoming greater.
In the meantime, K-sure signed an MOU with the United Chemical Co., LG Chemical and Korea Export and Import Bank on Aug. 25 to support LG Chemical's moves to secure Kazakh polyethylene plant construction project. Signatories to the MOU include President Cho, Chairman Kim Yong-hwan of the Korea Exim Bank, Vice Chairman Kim Ban-seok of LG Chemical and Chairman Dauren Yerdebay of UCC with Presidents Lee, and Nazarbayeb watching the signing. President Lee traveled to the Central Asian country on a leg of his tour of three Central Asian nations including Uzbekistan and Mongolia from Aug. 21 to 25.
K-sure also issued a guarantee insurance for $65 million loan that Daewoo Offshore and Shipbuilding got for its moves to M&A the right to drill for oil in the Cepu mining block in Indonesia, jointly with Korea Investment Corp. Daewoo needed $100 million to secure a stake in the Indonesian mining block and needed $65 million in financing to add to its own $35 million in funds. Daewoo has to repay the loan in five years and the company is in a good position to secure the stake in the mining district. nw