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Doosan Heavy to get additional 800 bln won from policy lenders

All News 11:25 April 27, 2020

SEOUL, April 27 (Yonhap) -- South Korea's two policy lenders plan to provide additional financial assistance worth about 800 billion won (US$649.8 million) to troubled Doosan Heavy Industries & Construction Co., a creditor bank official familiar with the matter said Monday.

The move by the Korea Development Bank (KDB) and Export-Import Bank of Korea (Eximbank) comes two weeks after Doosan Group submitted Doosan Heavy's self-rescue plans to creditors.

Still, a Doosan Heavy official said he could not confirm the additional financial aid.

In March, the largest power equipment maker in South Korea opened a 500 billion-won credit line with the KDB and Eximbank, respectively.

This file photo, from April 8, 2020, shows Doosan Group's logo in front of Doosan Tower in Seoul. (Yonhap)

This file photo, from April 8, 2020, shows Doosan Group's logo in front of Doosan Tower in Seoul. (Yonhap)

Last week, Eximbank converted $500 million worth of dollar-denominated debt sold by Doosan Heavy into the loans, as the power equipment maker cannot repay the debt set to mature this week.

Eximbank delivered a payment guarantee when Doosan Heavy issued dollar-denominated corporate bonds in April 2015, but Doosan Heavy has faced a liquidity crisis due to years of declining orders amid an economic slowdown.

Doosan Heavy's net losses deepened in recent years, as South Korea has pushed to boost the supply of power from clean and renewable energy sources while weaning the country off nuclear and coal-fired plants.

Doosan Heavy posted accumulated net losses worth 2.68 trillion won from 2014 through 2019.

Doosan Heavy said orders worth about 10 trillion won have dried up due to the cancellation of nuclear and coal-fired plant projects in South Korea.

South Korea, which decommissioned two nuclear power plants in 2017 and 2019, is set to retire 10 out of the total 24 reactors here by the end of 2030.

Doosan Heavy said about 650 out of its total of 6,700 employees have opted to leave the company in its first retirement program in five years as part of its efforts to cut costs amid dwindling orders.


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