Korean shipbuilding giant Daewoo Shipbuilding and Marine Engineering (DSME) will not see any more cash injections from its creditors this year, according to the new head of the Korea Development Bank (KDB).
“There will be no additional bailouts for Daewoo Shipbuilding this year, since it has already received 2 trillion won,” Yonhap reports citing KDB Chairman and Chief Executive Lee Dong-geol.
The ailing shipbuilder has been struggling with losses due to the industry slump, driven primarily by the offshore industry and order cancellations.
In October 2015, state-run creditors of DSME decided to pump KRW 4.2 trillion (USD 3.7 billion) into the company hit by two consecutive quarters of multi-trillion losses.
Nevertheless, the lifeline was given only after drastic restructuring measures including cutting around 300 jobs, as well as offloading of its wind power unit and a shipyard in Romania. DSME ended up cutting its workforce from 13,000 to 12,000 people.
Previously, DSME’s creditors had already injected KRW 2.9 trillion into the faltering shipbuilder.
Having in mind the fact that the year started on a pretty slow note, with no orders for the Korean big three in January, a question remains on how will DSME weather the storm.
World Maritime News Staff