DSME Selling USD 702 Mn Worth of New Shares
In an effort to improve its financial situation, the South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering unveiled its plans to sell KRW 793 billion (USD 702.2 million) worth of new shares.
According to a stock exchange filing, DSME’s shares will be sold to the company’s main creditor, the state-run Korea Development Bank (KDB), and other lenders, at a price of KRW 40,350 per share.
Almost a year after the financially troubled shipbuilder’s stock ceased trading in July 2016, DSME’s creditors are looking to help resume the trading on the Seoul bourse in 2017, Yonhap News Agency informed.
In late March, the company’s creditors unveiled a new restructuring plan for the South Korean giant, which includes KRW 2.9 trillion (USD 2.6 billion) of fresh funds.
As stipulated in the rescue plan, half of the shipyard’s commercial papers are expected to be converted into equity with the rest being rolled over, a transaction which would push DSME’s debt ratio to 300%, compared to 2,732% at the end of 2016.
KDB and Export-Import Bank of Korea’s (KEXIM) restructuring plan sets out three key principles, that debt restructuring should come first, financial assistance should follow later, and that all stakeholders should bear a burden of losses.
By applying stringent self-rescue efforts, DSME managed to return to the black in the first quarter of 2017, delivering an operating profit of KRW 291.8 billion compared to an operating loss of KRW 38.1 billion.
The shipbuilder’s net income for the period bounced back to KRW 261.3 billion from a net loss of KRW 3.4 billion seen in the first three months of 2016.
World Maritime News Staff