Hyundai Merchant Marine Co., South Korea's top shipping firm, said Friday that its shareholders approved a proposal to raise the number of stocks and bonds to be sold, paving the way to get fresh funding from a state-backed firm.

Earlier, Korea Shipping Co. said it would buy stocks and debt to be sold by Hyundai Merchant, as part of efforts to help jack up its financial status.

Established earlier this month, Korea Shipping helps local shipping lines buy new vessels with the aim to support local shipping firms, as well as shipbuilders, struggling with falling new orders and mounting losses.

Under the plan, Korea Shipping will provide some 720 billion won to Hyundai Merchant this month or next to shore up its capital base.

Some 150 billion won will be earmarked to buy Hyundai Merchant stocks, with the remaining to be used to buy debt convertible into the shipper's stocks.

The official also said earlier the state-backed firm will buy some 10 container vessels operated by Hyundai Merchant, and lease them back to the shipper.

Separately, Hyundai Merchant will place orders for five container vessels and two or three oil tankers later this year with the state-backed financing program. (Yonhap)