DSME Narrows Loss as Union Jeopardises Financial Boost

Image Courtesy: DSME

South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) has managed to narrow its net loss in the third quarter ended September 30 to KRW 238.1 billion (USD 203.9 million) compared to a net loss of KRW 1.14 trillion (USD 976.6 million) seen in the same quarter a year earlier.

During the first nine months of the year, the shipbuilder’s net loss shrunk to KRW 1.42 trillion from a net loss of KRW 2.19 trillion reported in the nine-month period in the previous year.

The decrease in net loss is attributed to the company’s stringent cost-cutting measures undertaken as part of DSME’s restructuring procedure.

The financial results were released only days after reports that the shipbuilding major’s creditors would inject KRW 2.8 trillion (USD 2.4 billion) into the company if DSME’s labor union accepts the restructuring scheme.

Namely, the Korea Development Bank (KDB) intended to convert KRW 1.8 trillion of debt into equity. The bank had earlier converted around KRW 400 billion worth of loans into DSME’s stocks.

The second creditor, the Export-Import Bank of Korea, had plans to buy KRW 1 trillion worth of bonds that would be sold by the shipbuilding company.

However, the restructuring plan, which was introduced in order to prevent the shipbuilder’s delisting from the stock market, has once again encountered an obstacle as DSME’s labor union on Moday said that it would not accept the scheme, according to Korea Herald.

If the union’s approval letter is not submitted to the creditors by Friday, the banks may withdraw their injection plan, which could push the shipbuilder toward delisting and bankruptcy.

World Maritime News Staff

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jul 2017 >>
MTWTFSS
26 27 28 29 30 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

Global Liner Shipping Asia Conference

Fight. Survive. Thrive. Respond to challenges of consolidation & disruption at the largest gathering of container shipping industry in Asia…

read more >

Bunkering Week 2017

IBC’s biennial Bunkering Week is back with its successful series of 3 co-located events: 8th Bunkering in Asia, 4th LNG Bunkering and EMTECH: Ship Emissions Technology Conference. With a proven track record of bringing together top decision makers from various industry sectors, this remains the go to event for ship owners, fuel suppliers, traders and […]

read more >

Indonesia Marine & Offshore Expo (IMOX) 2017

Indonesia Marine & Offshore Expo (IMOX) 2017, Batamis an international maritime and offshore industrial event that brings an international…

read more >

Salvage & Wreck Asia

Could your business be affected by shipwreck? Are you a salvage professional or a wreck removal expert? …

read more >