Founding of World-Wide Shipping
As his business grew Pao looked around for suitable new ventures and in 1955 decided to branch into shipping (still focusing on assets that were not fixed in Hong Kong) and embarked on an intensive learning process. Shipowning in Hong Kong had a poor reputation at that time with the banks and so the first vessel, a 28 year old coal burning 8,200 tonne freighter, was purchased without finance. Having seen this and the rigorousness employed by Pao in the purchase process, the Hongkong Bank extended a loan for the second purchase, the start of long and fruitful relationship which lead to Pao being appointed to the board of the bank in 1971 and later to become its Vice Chairman.
The shipping business grew rapidly driven by the post war economic miracle taking place in Japan and the resulting need for freight and oil carrying capacity. Pao devised a system whereby he was able to secure bank guaranteed three year charters prior to purchasing ships thus significantly reducing the business risks and creating a very attractive lending opportunity for the banks financing the ship purchase. This basic scheme (known in Japan as a "shikumisen" arrangement) was extended when World-Wide moved into commissioning construction of new ships in 1961.
By 1979 the fleet was some 202 vessels with a total of 20.5 million DWT, by far and away the largest fleet in the world. Indeed, the fleet was larger than the combined fleets of the famous Onassis, Niarchos and Lemos families. In recognition of his achievements Pao was made an Honorary Doctor of Law by the Hong Kong University in 1975 and in 1976 appeared on the front cover of Newsweek magazine with the heading "King of the Sea". He was knighted in 1978.
Read more about this topic: Yue-Kong Pao
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