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Daewoo Shipbuilding chief vows efforts to revitalize ailing shipbuilder

All News 20:58 June 08, 2016

ATHENS, June 8 (Yonhap) -- The chief of Daewoo Shipbuilding & Marine Engineering Co. on Wednesday vowed efforts to revitalize the troubled shipbuilder as its creditors have approved its self-rescue plan worth 5.3 trillion won (US$4.6 billion).

South Korean shipbuilders including Daewoo Shipbuilding have been under severe financial strains in the face of falls in new orders amid a protracted slump in the world's economy.

Jung Sung-leep, president of Daewoo Shipbuilding, told reporters in Athens that he will make efforts to run his company smoothly with the aid worth 4.2 trillion won that was offered last year by creditors.

"Even if the company faces serious setbacks, there will be no more requests for the government to additionally pump money into us," Jung said.

He is in Athens to attend an exposition on shipbuilders at a time when local shipbuilding companies are struggling to stay afloat amid an industry-wide downturn.

Earlier in the day, the government and the central bank said they will set up an 11 trillion won fund to help two state-run banks support the country's ailing shipbuilders and shippers.

On the same day, creditor banks gave a nod to the self-rescue plans worth a combined 10.35 trillion won submitted by the country's three major shipbuilders -- Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering.

Daewoo Shipbuilding's net profit came to 31.4 billion won in the first quarter, a turnaround from a loss of 1.12 trillion won in the previous quarter. But it posted an operating loss worth 26.3 billion won last quarter from its loss of 1.06 trillion won three months earlier.

Jung said that his company is likely to return to the black in the first half, adding that if oil prices are on the rising trend, local shipbuilders are likely to recover on the back of an increase in new orders.

Touching on an overhaul plan, the president said that he plans to reduce the portion of the off-shore plant business to 30 percent from the current 55 percent.

"Instead, we are seeking to raise the portion of the merchant ship business to about 60 percent," he said.

Jung said that the shipbuilder is likely to complete a spin-off of its defense-related unit by the second half of next year.
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