Bank provides full guarantee coverage through its own credit review
Gwangju Bank announced Tuesday that it has issued a refund guarantee worth $36.81 million to Daehan Shipbuilding, a mid-sized shipbuilder based in Haenam-gun, South Jeolla Province.
A refund guarantee, or RG, is a financial instrument in which a bank guarantees the return of advance payments made by a shipowner to a shipbuilder, protecting the owner against the builder's failure to fulfill its contractual obligations. It is a key financing tool for securing ship orders and ensuring the execution of shipbuilding contracts.
The guarantee covers a shipbuilding contract for a 157,000-ton crude oil tanker. It was issued to bolster Daehan Shipbuilding's competitiveness in winning orders at a time when shipbuilders have struggled to secure financing due to constraints such as RG issuance limits, even as global ship orders remain strong.
Gwangju Bank has previously provided guarantee support for three other vessels ordered by Daehan Shipbuilding, in partnership with policy finance institutions.
Daehan Shipbuilding is a leading regional mid-sized shipbuilder with strong technical capabilities and a stable order backlog. The RG support from Gwangju Bank will help the company secure the financial conditions needed to fulfill its shipbuilding contracts.
Deputy President Kim Jong-hun said the issuance "is a meaningful example of supporting the growth of a regional company and putting productive finance into practice on the ground, in line with the government's policy of supporting the shipbuilding industry." He added that the bank, as the representative financial institution of the integrated special city of Jeonnam-Gwangju, would continue to contribute to strengthening the competitiveness of the regional industrial ecosystem and revitalizing the local economy.
sij@heraldcorp.com
