Daewoo Ship Says Romania's Government May Guarantee Loan to Shipyard Unit

Daewoo Shipbuilding & Marine Engineering Co., the world’s second-largest shipyard, said its unit in Romania may receive backing for a loan to fund operations from the government of the east European country. The government may guarantee a loan of about 100 billion won ($83 million) from a Romanian bank for Daewoo-Mangalia Heavy Industries SA, said Ahn Wook Hyeon, a spokesman at the South Korean shipyard. He declined to identify the bank.
The venture, 51-percent owned by Daewoo, had more debt than capital at the end of last year, hampering its ability to increase capacity. Daewoo-Mangalia Heavy Industries SA has an order backlog for 14 vessels worth about $1.1 billion, representing more than two years of work.
The South Korean company, which is based in Seoul, backed loans worth 70 billion won to the Romanian unit two months ago, Ahn said. The Korea Economic Daily earlier reported that Daewoo will inject 170 billion won into the venture.
Daewoo was up 2.2 percent to 18,400 won at 10:17 a.m. in Seoul. The stock has risen more than 5 percent this year, compared with a 2 percent decline in South Korea’s Kospi index.
Daewoo Shipbuilding bought its stake in Daewoo-Mangalia, which is based in the Black Sea port of Constanta in eastern Romania, in 1997. The remaining share is held by the Romanian government-owned 2 Mai Mangalia Shipyard.