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Pension fund to announce outcome of meeting on Daewoo Shipbuilding

All News 10:01 April 06, 2017

SEOUL, April 6 (Yonhap) -- South Korea's state pension fund, one of the key debt holders for ailing Daewoo Shipbuilding & Marine Engineering Co., is set to announce the outcome of its meeting about debt rescheduling measures that aim to keep the shipyard afloat.

The National Pension Service (NPS), which holds about 30 percent of bonds sold by Daewoo Shipbuilding, said it will announce the meeting's outcome on the troubled shipbuilder before Thursday noon.

Of 1.35 trillion won (US$1.19 billion) worth of corporate bonds sold by Daewoo Shipbuilding, the NPS holds 388.7 billion won. In particular, the NPS holds about 45 percent of 440 billion won worth of the bonds maturing on April 21.

Unless the NPS accepts a debt-for-equity swap and other debt rescheduling measures, analysts say a rescue package for Daewoo Shipbuilding may not succeed.

It was not clear whether the NPS will announce its final stance on whether to agree on debt rescheduling measures on Thursday.

Late last month, state-run creditor banks announced a fresh rescue package worth 6.7 trillion won for Daewoo Shipbuilding, but only if all stakeholders agree to a debt-for-equity swap plan.

The huge rescue measures represent the second round of bailouts for the shipbuilder that has been suffering from severe liquidity problems over heavy losses in its offshore projects.

Under the rescue package, Daewoo Shipbuilding will receive new loans worth 2.9 trillion won if lenders and bondholders agree to swap 2.9 trillion won of debt for new shares in the shipbuilder.

Bondholders are also required to give a three-year grace period to the repayment of the remaining debt.

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