DSME obtains refund guarantee

Daewoo Shipbuilding & Marine Engineering (DSME) obtained a refund guarantee (RG) from the state-run Korea Development Bank (KDB) for an order it won from a Greek shipping firm, the company said Monday.

The cash-strapped shipbuilder said it received a down payment amounting to 10 percent of the contract price from Angelicoussis Shipping Group on June 24 after securing an RG from KDB a week earlier.

This means that the Greek shipping group will be able to get the down payment back from the bank even if DSME fails to honor the contract.

On June 9, DSME won a contract valued at $580 million for building two liquefied natural gas (LNG) carriers and two very large crude oil carriers (VLCC).

Normally, a shipbuilder can receive down payments from a shipping firm only after it secures RG from a bank.

“Obtaining RG proves that DSME is operating normally,” a DSME spokesman said. “This will help us deliver ships to our clients as scheduled and win more contracts in the future.”
Source: KTimes