South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co (DSME) has confirmed to be in discussions with its creditors on potential moves that would improve the company’s financial status.
The shipbuilder said in a filing with Korea Stock Exchange that it was considering various measures with creditors, but it did not disclose any further details on potential arrangements that might be involved in the process.
The announcement comes on the back of DSME’s share plunge on Wednesday, 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.
DSME closed at 8,750 won in Seoul trading Wednesday, marking a 30% fall and reaching its lowest level in more than 12 years.
According to the report, the creditors, led by state-run Korea Development Bank, are reviewing massive restructuring moves for the shipbuilder, including asset sales.
Other creditors include Hana Bank and Korea Exchange Bank which have extended a combined KRW 1.01 trillion worth of loans, followed by Kookmin Bank with KRW 897 billion, Woori Bank and Shinhan Bank with KRW 547 billion and 409 billion each, totaling in KRW 21.7 trillion, Yonhap reports citing NH-Woori Investment & Securities’ data.
The shipbuilder had already revealed plans to trim down its mounting debt having posted a loss of KRW 138.7 billion in the first quarter.
The plans included massive restructuring, switching focus 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