skorea throws shipbuilder daewoo new 6 bn lifeline
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

As the giant firm's financial crisis worsens.

S.Korea throws shipbuilder Daewoo new $6 bn lifeline

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice S.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.

 

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

 



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

 



GMT 10:31 2014 Tuesday ,23 December

Mirages of failure: Lebanon cannot wait

GMT 16:17 2018 Thursday ,30 August

Five Saudi women pilots granted GACA licences

GMT 05:38 2017 Tuesday ,05 September

Serious need for progress in the peace process

GMT 00:18 2017 Wednesday ,22 February

Mugabe marks 93rd birthday with faltering TV interview

GMT 12:48 2017 Tuesday ,09 May

King, Egyptian president hold talks

GMT 18:03 2017 Friday ,17 November

HH Sheikha Moza Witnesses Opening of 2017 WISE Summit

GMT 07:18 2017 Monday ,19 June

ARC Secretary General Najla Al Shamsi in Riyadh

GMT 08:18 2013 Thursday ,31 October

\'Early medication for HIV is cost-effective\'

GMT 19:23 2017 Monday ,23 January

80 Houthi Militants Killed in Airstrikes

GMT 22:44 2017 Friday ,21 July

HM King ratifies, issues 4 laws

GMT 13:34 2016 Saturday ,29 October

Biden ‘tops Clinton list for secretary of state’

GMT 20:00 2017 Saturday ,15 July

Bahrain condemns terrorist attack in Giza

GMT 09:20 2017 Wednesday ,05 July

Mohamed bin Zayed receives phone call

GMT 14:18 2012 Sunday ,13 May

Why some men hide in bathrooms

GMT 12:26 2012 Thursday ,28 June

Pakistan releases Indian spy

GMT 20:33 2013 Friday ,09 August

New menswear brand Pin Collar Shirts launches

GMT 13:43 2013 Wednesday ,06 November

Urban Retreat announces launch of debut skincare line

GMT 15:59 2017 Wednesday ,13 September

Nahyan bin Zayed, Abdullah bin Hamad offer condolences

GMT 09:47 2017 Wednesday ,29 November

UAE has what it takes to become the future capital

GMT 18:14 2017 Friday ,03 March

The Moroccan artist Hakim prepares new song
Emiratesvoice, emirates voice
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice