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(LEAD) Main creditor, NPS open for negotiations on Daewoo Shipbuilding

All News 14:30 April 13, 2017

(ATTN: UPDATES with pension fund's stance in first 7 paras; CHANGES headline)

SEOUL, April 13 (Yonhap) -- The state-run main creditor of troubled Daewoo Shipbuilding & Marine Engineering Co. and a state pension fund said Thursday they were open for negotiations on the ailing shipbuilder's debt rescheduling measures.

It is still too early to say whether they would hammer out a deal, but their shift of stance towards negotiations slightly raised the prospects of saving Daewoo Shipbuilding.

Earlier in the day, Lee Dong-geol, the chief of the state-run Korea Development Bank, the main creditor for the embattled shipbuilder, said the bank is willing to negotiate with the National Pension Service (NPS), in a shift from the KDB's previous stance that the bank will not accept demands by the NPS.

The remarks by Lee came as the NPS, a major bondholder of Daewoo Shipbuilding, is set to hold a meeting later this week to decide whether to accept a debt-for-equity swap plan, seen as a crucial test for Daewoo Shipbuilding to receive fresh funds to repay its debts.

"The room for negotiations with the NPS is 100 percent open," Lee told reporters, adding that he expects the pension fund to make a "wise" decision.

An NPS official told Yonhap News Agency by telephone that the fund was also willing to hold negotiations with the KDB.

"The door for negotiations is still open," the NPS official said.

Late last month, the KDB and another state-run creditor bank announced a fresh rescue package worth 6.7 trillion won (US$5.9 billion) for Daewoo Shipbuilding, but only if all stakeholders agree to the debt-for-equity swap plan.

The huge assistance 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.

The NPS, which holds about 30 percent of bonds sold by Daewoo Shipbuilding, has demanded the KDB further slash the equity capital of the shipbuilder.

Among other demands, the NPS has asked the KDB to cover the debts of Daewoo Shipbuilding that are maturing this month.

(LEAD) Main creditor, NPS open for negotiations on Daewoo Shipbuilding - 1


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