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[THE INVESTOR] The Korea Development Bank is planning a large-scale capital increase for ailing shipbuilder Daewoo Shipbuilding and Marine Engineering within the year, local media reported Aug. 17. KDB is DSME’s largest shareholder and main creditor bank.
According to reports, KDB will raise capital using means approved by financial authorities to resolve DSME’s insolvency. At the end of the first half of the year, DSME’s assets came to about 15.59 trillion won (US$14.09 billion), while debt stood at 16.82 trillion won. If the company’s assets aren’t increased by about 1.23 trillion won within the year, the shipbuilder would be delisted.
According to reports, KDB will raise capital using means approved by financial authorities to resolve DSME’s insolvency. At the end of the first half of the year, DSME’s assets came to about 15.59 trillion won (US$14.09 billion), while debt stood at 16.82 trillion won. If the company’s assets aren’t increased by about 1.23 trillion won within the year, the shipbuilder would be delisted.
One of the main factors in deciding the scale of the capital increase is the delivery and payment of two drill ships DSME built for Sonangol Group, Angola’s state-run oil and gas company.
The contract is worth about 1 trillion won, and if payment is made in the near future, about 500 billion won would be sufficient for DSME.
However, with Sonangol reportedly experiencing issues in raising the funds required, it remains unclear whether the shipbuilder will get the much needed cash.
The two sides, however, are said to be working on making the delivery within September.
Choi He-suk (cheesuk@heraldcorp.com)
