Daewoo Shipbuilding shareholder says to sell controlling stake

Korea Development Bank (KDB), the main creditor of troubled Daewoo Shipbuilding & Marine Engineering Co Ltd (042660.KS), said on Thursday it wants to sell its controlling stake in Daewoo as soon as possible.

Daewoo’s state-run creditors including Export-Import Bank of Korea said they would provide about 4.2 trillion won ($3.68 billion) in a rescue package for the shipbuilder to cover what could be an additional 3 trillion won in losses in the future, KDB said in a statement.

Daewoo, the world’s largest shipbuilder in terms of current orderbook by tonnage as of September, posted a provisional operating loss of 1.2 trillion won in the September quarter, bringing the loss for the year to date to a record 4.3 trillion won.

KDB owned a 31.5 percent stake worth about 412.5 billion won as of Thursday’s close. It gave no specific schedule for the sale.

Daewoo’s outlook is clouded by delays in the construction of high-end offshore plants and the cancellation of a drillship order due in part to low oil prices which have hit shipowners’ profitability, KDB said.

State-run creditor banks opted not to insist on a formal creditor-led restructuring or court-ordered bankruptcy as Daewoo employs more than 40,000 people including subcontractors, and due to concern about lasting damage to South Korea’s shipbuilding industry, the bank added.

Daewoo plans to raise some 750 billion won by selling non-core assets, cut costs by 1.1 trillion won over the next three years, and reduce its workforce after 2016, when manpower-heavy offshore plants on order are delivered.
Source: (Reporting by Joyce Lee; Editing by Stephen Coates)