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HHI gets backing from seven banks for refund guarantee

HHI gets backing from seven banks for refund guarantee
South Korea’s Hyundai Heavy Industries (HHI) has gotten backing from seven local banks for refund guarantee to allow the shipyard to clinch shipbuilding projects, reports said.

The seven banks, which included HHI’s main creditor KEB Hana Bank, are expected to issue the refund guarantee for the shipbuilding group by early October, The Korea Herald reported.

A refund guarantee issued by a shipyard’s bank is important for a vessel purchaser when ordering a newbuilding. In the event of a default by the yard, the refund guarantee will cover the vessel purchaser with the money already paid.

HHI is currently going through a restructuring as it struggles to make operating profits and increase liquidity. The group’s restructuring plan involved disposing of stakes in various subsidiaries, selling of certain assets, reducing workforce and cutting salaries.