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Chief regulator to tighten grip on shipbuilding sector overhaul

All News 10:20 June 14, 2016

SEOUL, June 14 (Yonhap) -- The country's chief financial regulator will oversee whether the restructuring efforts by the nation's major shipyards will proceed as planned as part of efforts to ratchet up pressure on them to carry out their promised overhaul moves, industry sources said Tuesday.

According to the sources, Financial Services Commission Chairman Yim Jong-yong will chair a bi-weekly meeting to check local shipbuilders' self-restructuring plans and their implementation.

The country's top three shipyards -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co., and Samsung Heavy Industries Co. -- have drawn up a combined 10.3 trillion won (US$8.79 billion) worth of self-restructuring schemes to tide over a protracted slump and mounting losses.

The financial authorities and the shipyards' creditors -- state-run Korea Development Bank and KEB-Hana Bank -- have warned that they would put the ailing shipyards under receivership unless their self-rescue schemes are implemented as promised.

The country's big three shipbuilders are required to submit their detailed plans next week to their creditors, according to the sources.

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

The country's top three shipyards suffered a combined operating loss of 8.5 trillion won last year due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump.

A huge chunk of the loss, some 5.5 trillion won, came from Daewoo Shipbuilding.


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