skorea throws shipbuilder daewoo new 6 bn lifeline
Wednesday 19 March 2025
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

As the giant firm's financial crisis worsens.

S.Korea throws shipbuilder Daewoo new $6 bn lifeline

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleS.Korea throws shipbuilder Daewoo new $6 bn lifeline

South Korea has offered troubled Daewoo Shipbuilding & Marine Co.
Seoul - Arab Today

South Korea offered troubled Daewoo Shipbuilding & Marine Co. a new $6 billion bailout on Thursday, as the giant firm's financial crisis worsens.

Daewoo is the world's largest shipyard in terms of its order book and was previously given a 4.2 trillion won ($3.8 billion) aid package in 2015.

It is majority-owned by state-owned banks. Previously it was a subsidiary of the now-defunct Daewoo Group, once the country's second-largest conglomerate but which collapsed in the 1990s.

The shipbuilding unit survived, only for the sector to suffer turmoil of its own in the face of a global glut of vessels and ferocious price competition from China.

It suffered a 2.7 trillion won net loss last year, with its debts 27 times greater than its capital.

The 6.7 trillion won ($6.0 billion) bailout envisages 2.9 trillion won in fresh loans from the Korea Development Bank (KDB), its largest shareholder and main creditor, and the Export-Import Bank of Korea, also a shareholder.

The money is conditional on other lenders and bondholders agreeing another 3.8 trillion won in debt-for-equity swaps and rollovers.

The new rescue plan sparked criticism that Seoul was backtracking on earlier promises to stop injecting fresh funds into Daewoo.

"We're very sorry that we've failed to assess more conservatively the industry's long-term slump and Daewoo's latent downside risks," said KDB CEO Lee Dong-Geol.

Daewoo was in "critical" financial condition and would face insolvency in April, when it has to repay large corporate bonds, unless "strong and comprehensive measures" were taken, he told journalists.

Economist Chun Seong-In at Hongik University lambasted the finance ministry for being "inconsistent, belated and unfair" in its dealings with the company, which has more than 10,000 employees.

The ministry "missed a chance for a radical corporate restructuring" in 2015, forcing the government to inject additional funds, he said.

- 'Big Three' -

The global shipbuilding slump is expected to ease from 2018, when according to Yonhap news agency the government hopes to sell a downsized and reborn Daewoo to reduce the country's "Big Three" shipbuilders -- which also include Hyundai Heavy Industries and Samsung Heavy Industries -- to two, for better economies of scale.

The "Big Three" shipbuilders were once considered jewels in Korea Inc.'s corporate crown, controlling nearly 70 percent of the global market after seeing off their European and Japanese rivals in the 1980s and 1990s.

Year after year, they churned out massive cargo ships, oil tankers and offshore drilling rigs for shipping firms and energy giants around the world.

But a prolonged slump in oil prices and the global economic slowdown sapped demand for tankers and container ships, while overcapacity, regional rivalry and competition from cheaper Chinese shipbuilders squeezed profit margins.

The three racked up a collective loss of 8.5 trillion won ($7.4 billion) in 2015.

Daewoo Shipbuilding's former head Ko Jae-Ho was in January sentenced to 10 years in prison for manipulating the company's books in 2013 and 2014, and using them to raise bank loans.

Investors sustained serious financial losses as the company's credit ratings and stocks plunged after the window-dressing came to light.

 

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

skorea throws shipbuilder daewoo new 6 bn lifeline skorea throws shipbuilder daewoo new 6 bn lifeline

 



Themuslimchronicle, themuslimchronicle

GMT 08:26 2018 Tuesday ,23 January

Five things to know about Davos

GMT 11:05 2017 Thursday ,21 December

Protests rock Iraqi Kurdistan despite police clampdown

GMT 14:06 2017 Saturday ,16 December

16 insurgents killed in eastern Afghan provinces

GMT 11:46 2015 Monday ,13 July

Get the Armani Privé look

GMT 10:53 2017 Tuesday ,17 January

Rio Tinto ships more iron ore as prices surge

GMT 09:18 2017 Tuesday ,05 September

US pushes for 'strongest possible' UN sanctions

GMT 10:34 2017 Tuesday ,14 November

UAE Ambassador, Saudi Governor discuss relations

GMT 08:22 2015 Sunday ,01 November

Trump, bacon and creativity at NYC Halloween parade

GMT 15:39 2017 Wednesday ,04 January

Global launch by Huawei of new mid-range smartphone

GMT 08:44 2016 Tuesday ,22 March

Indonesian drivers stage violent anti-Uber protest

GMT 12:52 2017 Monday ,06 March

Air pollution linked to 600,000 deaths

GMT 14:15 2017 Thursday ,07 September

Outspoken Tanzanian opposition figure shot and wounded

GMT 09:00 2017 Sunday ,23 July

Turkish president begins his 2-day Gulf tour

GMT 07:30 2017 Friday ,07 April

US launches missile strike on Syria airbase

GMT 19:38 2017 Tuesday ,26 September

King Salman orders driving licenses for women
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2025 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2025 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle