The restructuring of the financially-troubled South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME) will go ahead as Korean Development Bank (KDB) plans to inject fresh funds to support the bailout plan despite the opposition from an individual investor, the Korea Herald reports citing the bank as saying.
“One investor opposing the funds is not going to stop the plan from continuing to move forward,” a KDB spokesperson is quoted as saying.
The announcement was made in the aftermath of a court rejection of the appeal from a group of individual investors to the bailout plan. However, the investor is said to be planning to take the case to the top court soon, as informed by Korean media.
The plan envisages, half of the shipyard’s commercial papers to be converted into equity with the rest being rolled over. DSME’s creditors Korea Development Bank (KDB) and Export-Import Bank of Korea (KEXIM) will in exchange provide the company with KRW 2.9 trillion (USD 2.6 billion).
The transaction would push the debt ratio to 300%, compared to 2,732% at the end of 2016.
Separately, the bank said in a press release on Monday that the management committee for the shipbuilder’s normalization, comprising experts from the shipbuilding industry, finance, restructuring, accounting and legal sector along with representatives from credit banks, held a meeting in Seoul on Monday afternoon.
As disclosed, the committee will meet on monthly basis to discuss major issues regarding the company’s restructuring plan and its future effective management. The first meeting is scheduled to be held in June, the key topic on its agenda being the review of DSME’s self-initiated rescue plan and discussion of the plan’s management in 2017.
KDB said in the statement that the committee plans to implement the management normalization plan “in an efficient, professional and objective manner as soon as possible.”
DSME has managed to return to the black in the first quarter of 2017, following stringent self-rescue efforts which included workforce reduction and asset sales.
The company’s operating profit for the period bounced back to KRW 291.8 billion compared to an operating loss of KRW 38.1 billion.
A similar turnaround was reported for DSME’s net income which reached KRW 261.3 billion for the quarter ended March 31, 2017, against a net loss of KRW 3.4 billion seen in the same three-month period in 2016.
World Maritime News Staff