SEOUL, Oct. 26 (Korea Bizwire) – Daewoo Shipbuilding & Marine Engineering Co., a major shipyard here, said Wednesday that it has sold off its headquarters building in downtown Seoul for 170 billion won (US$150 million) to a local asset manager.
The shipyard will lease the building for the time being, according to the shipbuilder.
The latest asset sale is part of its broader efforts to cut costs amid a protracted industrywide slump.
Earlier this month, Daewoo Shipbuilding said it plans to cut its workforce by about 20 percent before the end of the year, and is seeking to sell other noncore assets.
In the first half of the year, Daewoo Shipbuilding suffered a net loss of 1.19 trillion won with its debt ratio exceeding 7,000 percent.
South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.
The country’s top three shipyards — Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. — suffered a combined operating loss of 8.5 trillion won last year. The loss was due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with Daewoo Shipbuilding alone posting a 5.5-trillion-won loss.
The shipbuilders have recently drawn up sweeping self-rescue programs worth 10.35 trillion won in desperate bids to overcome the protracted slump and mounting losses.