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S Korea’s DSME to get US$2.4b lifeline from creditors: report


FINANCIALLY-TROUBLED Daewoo Shipbuilding & Marine Engineering (DSME) is reported have won the support of its creditors who plan to financially support the South Korean shipbuilder with KRW2.8 trillion (US$2.4 billion), under proviso that the company's labour union accepts the restructuring scheme, World Maritime News reported citing local media reportes.

DSME's creditors, the Korea Development Bank (KDB) and the Export-Import Bank of Korea, have introduced the restructuring plan to prevent the shipbuilder's delisting from the stock market.

Under the plan, KDB intends to convert KRW1.8 trillion of debt into equity, and the bank has already converted around KRW400 billion worth of loans into DSME's stocks.

The second creditor, the Export-Import Bank of Korea, plans to buy KRW1 trillion worth of bonds that will be sold by the shipbuilding company.

However, the creditors said they will implement the restructuring scheme, which includes a workforce reduction, only if the labour union refrains from taking industrial action.

The labour union is now required to accept the scheme until this Wednesday, Yonhap News Agency cited industry sources as saying.

DSME recently said it intends to raise an additional KRW700 billion through asset sales in 2016, as the shipbuilder expects to add up to five times less orders to its order book this year than initially projected.

With the new measure, DSME would raise a total of KRW6 trillion through its self-rescue plan.

Source: Schednet

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