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Daewoo Shipbuilding given option to sell more stocks

All News 11:00 March 11, 2016

SEOUL, March 11 (Yonhap) -- Shareholders of Daewoo Shipbuilding & Marine Engineering Co., a troubled shipbuilder, on Friday approved a proposal to amend the company's articles of association in order to further increase new stock sales.

The ailing shipyard is mulling an option to raise 590 billion won (US$492 million) by selling new shares to designated investors following last year's stock sale worth 414 billion won, as part of efforts to improve its financial status.

In December, its shareholders approved a scheme to raise the ceiling of new stock issuances. Friday's proposal, however, was aimed at making stock sales to designated investors not subject to such a cap.

Its creditors, led by state-run Korea Development Bank, have decided to provide 4.2 trillion won worth of financial aid, including the purchase of new stocks, to the shipbuilder.

In return, Daewoo Shipbuilding is seeking to cut costs and sell some affiliates, as well as its headquarters office building in Seoul, saving 1.85 trillion won in cash.

The shipyard suffered a record 5.1 trillion won in losses last year due to increased costs from a delay in the construction of offshore facilities and order cancellations amid a prolonged slump in the global shipbuilding sector.

Net losses came to 5.13 trillion won last year, shifting from the previous year's profit of 33 billion won, the company said in a regulatory filing.


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