SEOUL, April 17 (Korea Bizwire) – The main bondholder of Daewoo Shipbuilding & Marine Engineering Co. on Monday agreed to the voluntary debt rescheduling measures proposed by the state-run Korea Development Bank (KDB).
The National Pension Service Investment Management said it held a meeting of its investment committee and accepted measures to keep afloat the troubled shipbuilder.
“The decision was based on the best interest of the pension fund,” the investment management body said.
It said the National Pension Service (NPS), which controls some 30 percent of the shipbuilder’s corporate bonds, took into account that Daewoo Shipbuilding, KDB and the Export-Import Bank of Korea (Eximbank) all agreed to measures that would better ensure the repayment of corporate bonds that would be rescheduled.
Both the KDB and Eximbank sent letters over the weekend pledging the repayment of corporate bonds once conditions improved.
The pension service had been in drawn-out talks with main creditor banks to discuss ways to keep the shipyard, which has been suffering from a serious liquidity crunch due to a slowdown in global demand, in operation.
The acceptance by the NPS raises the possibility that other bondholders, which have been asked to share in the burden of helping the shipyard, will ultimately approve the rescheduling move early this week.
In addition to holding a large part of Daewoo’s bonds, the NPS owns 45.5 percent of 200 billion won (US$175 million) in commercial papers that comes due Friday.
Under the rescue plan half of the shipyard’s commercial papers will be converted into equity with the rest being rolled over that would give the Daewoo some leeway. KDB and Eximbank will in exchange inject 2.9 trillion won into the company that can allow it to stay in business.