Report: NPS Doubtful About DSME’s Restructuring Plan

Image Courtesy: DSME

South Korea’s National Pension Service (NPS), one of the main debt holders of Daewoo Shipbuilding & Marine Engineering (DSME), has not decided whether to accept the debt restructuring plan aimed at saving the country’s financially-troubled shipbuilder, Yonhap News Agency reports

The pension fund, which holds around one third of bonds sold by DSME, has still not decided on the restructuring measures amid “doubts over the financial situation”, Yonhap said referring to a statement issued by the NPS.

The decision is expected to be made by the end of next week.

If the fund does not accept the proposed measures, the proposed rescue package for the shipbuilder may be compromised.

In late March 2017, creditors of DSME unveiled a restructuring plan for the company, which includes KRW 2.9 trillion (USD 2.6 billion) of fresh funds.

Korea Development Bank (KDB) and Export-Import Bank of Korea (KEXIM) proposed a restructuring plan which sets out three key principles – debt restructuring should come first, financial assistance should follow later, and all stakeholders should bear a burden of losses.

The funds will be injected only if all stakeholders agree on debt restructuring and DSME undertakes intensive self-rescue measures.

Furthermore, labor union of DSME is ready to accept proposed 10 percent wage cuts for workers until the company improves its financial performance. In addition, workers agreed to halt labor negotiations as part of the self-rescue plan.

Separately, banks have agreed to provide a safety net for future orders won by DSME. Banks would provide a refund in case the shipbuilder cannot deliver the ordered vessel, Yonhap cited industry sources as saying.

In 2016, DSME reduced its full-year loss to KRW 2.7 trillion from KRW 3.3 trillion seen in 2015. The company managed to trim its loss having committed to a stringent self-rescue plan that entailed disposal of its non-core assets, such as its IT business, as well as its buildings and floating docks with a total worth of around KRW 500 billion.

World Maritime News Staff

Share this article

Follow World Maritime News

In Depth>

Events>

<< Dec 2017 >>
MTWTFSS
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

Maritime Reconnaissance and Surveillance Technology

Over the past few years, maritime intelligence gathering and ISR capabilities have returned to the forefront of the defence industry…

read more >

BWMTech

Clarify regulations. Plan BWMS integration. Prevent operational failure…

read more >

Mega Cargo Show 2018

The focus of the event is to bring all connected with cargo fraternity on a single platform…

read more >

Vietship 2018

Vietship is the largest and longest established exhibition in Vietnam featuring all aspect of Shipbuilding, Shipping and Offshore Technology.

Since its first event in 2002, Vietship has become the convergence and platform of advanced technologies regional and worldwide in shipbuilding and ship repair, marine equipment, waterway transportation and services, marine and offshore engineering.

After 16 years of eight consecutive editions, Vietship has affirm itself as an important event in enhancing cooperation and development, attracting investments, exchanging technology and creating ideal opportunities for trade promotion in the international maritime industry.

More info

read more >