Daewoo Shipbuilding and Marine Engineering’s (DSME) shares have made a substantial comeback today as the Korean shipbuilder stepped up its restructuring efforts.
Namely, Daewoo’s shares today traded at KRW 8,520 in Seoul, its largest daily gain since October 2014, after rising as much as 21 percent in the morning, Bloomberg reports.
The shares’ value shot up following announcements that Korea Development Bank, DSME’s largest shareholder, would buy KRW 1 trillion (USD 863.4 million) of equity and offer 1 trillion won in new loans.
KDB confirmed the plan in an announcement issued earlier today.
DSME’s shares plummeted by the daily permissible limit of 30% last week, following a media report that the company had amassed around KRW 2 trillion (USD 1.8 billion) of losses that have not yet been booked.
Having recorded the plunge, the shipbuilder launched talks with its creditors, led by state-run KDB, on massive restructuring moves for the shipbuilder, including asset sales.
Back in May, DSME’s new CEO Jung Sung-leep announced massive restructuring to trim down losses, which include focusing on core business and disposing of underperforming subsidiaries. DSME identified its core business to be construction of merchant vessels, specialized vessels, and offshore vessels and facilities.
World Maritime News Staff