Korea Trade Insurance Corporation (K-SURE) said Thursday it will provide 25 million euros ($28.8 million) in trade insurance to support Samsung C&T's German subsidiary as it navigates Europe's tightening carbon regulations.
Under the arrangement, banks will use K-SURE's insurance policy as collateral to purchase receivables from Samsung C&T's German unit on a non-recourse basis, meaning the subsidiary bears no additional liability. The subsidiary can then use the resulting cash as working capital, easing its liquidity burden.
K-SURE said the support is tailored financial assistance designed to reflect the shifting export environment Korean companies face as European carbon regulations take hold.
The introduction of the EU Carbon Border Adjustment Mechanism (CBAM) has prompted European companies to pass compliance and customs costs onto their suppliers, pushing Korean firms to restructure their sales operations around overseas subsidiaries. Securing working capital for those subsidiaries has emerged as a new financial challenge for Korean businesses.
"Changes in the global trade environment — including European carbon regulations — are demanding a new shift in how our companies conduct business overseas," K-SURE President Jang Young-jin said. "We will continue to actively support Korean companies so they can resolve financial difficulties in a timely manner and maintain their competitiveness in global markets."
oskymoon@heraldcorp.com
