Samsung Heavy Urged to Come Up with Self-Rescue Measures

In an effort to speed up the South Korea government’s restructuring plan targeting the financially troubled shipbuilding segment, the country’s shipbuilder Samsung Heavy Industries has been urged to devise a number of self-rescue measures, Yonhap news agency reports.

The state-run Korea Development Bank, the main creditor of Samsung Heavy, expects that the shipbuilder will submit its restructuring measures soon, which would include cost-cutting measures, Yonhap cited an official from KDB.

The move from the South Korean government comes amid the need to push harder for the restructuring of vulnerable industries which were hit by a global slowdown to reduce overcapacity and boost long competitiveness.

Under a three-track plan revealed by the country’s financial regulator, the Financial Services Commission, Daewoo Shipbuilding & Marine (DSME), one of the country’s big 3 shipbuilders, will be required to submit layoffs and cost savings, while the other two, Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI), would have to pursue self-rescue plans with their creditor banks.

Samsung Heavy Industries (SHI), which did not see a single new shipbuilding order during April, posted a KRW 1.2 trillion (USD 998 million) net profit loss for the financial year ending December 31, plunging from last year’s KRW 147 billion profit.

The company’s operating profit loss dropped to KRW 1.5 trillion against KRW 183 billion profit reported in 2014.

World Maritime News Staff

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