SEOUL, May 20 (Korea Bizwire) – Daewoo Shipbuilding & Marine Engineering Co., a troubled South Korean shipyard, is set to unveil a set of additional restructuring measures later in the day as the government and its creditors pressed it to map out stronger self-rescue measures, industry sources said Friday.
The proposal, to be submitted to its creditors, led by the state-run Korea Development Bank, may include a further cut in the workforce and wages, and sales of noncore assets.
Last year, the shipyard, faced with an extended slump in new orders and increased costs, announced a series of self-rescue measures, which the shipyard claims will save around 1.8 trillion won.
Daewoo Shipbuilding has been working to lay off some 2,300 workers and sell assets, in return for financial assistance from its creditors.
The second batch of self-rehabilitation steps comes as a drop in new orders is expected to continue down the road.
Other local rivals, such as Hyundai Heavy Industries Co., promised to implement self-rescue schemes to stay afloat.
Hyundai Heavy is moving to cut 10 percent of its workforce and sell noncore assets, and Samsung Heavy Industries Co. also submitted its self-rescue plan to its creditors last week.
The country’s top three shipyards suffered a combined operating loss of 8.5 trillion won (US$7.21 billion) last year, due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump.
But a huge chunk of the loss, some 5.5 trillion won, came from Daewoo Shipbuilding.
Also, Hyundai Heavy and Samsung Heavy swung to an operating income during the first quarter of the year, while Daewoo Shipbuilding suffered an operating loss of 26.3 billion won.