SEOUL, May 3 (Korea Bizwire) — Embattled Doosan Heavy Industries & Construction Co. is under growing pressure to sell more assets in return for aid from its creditors, industry sources said Sunday.
Last week, parent Doosan Group submitted Doosan Heavy’s final self-rescue plans, worth more than 3 trillion won (US$2.45 billion), to the creditors led by state-run Korea Development Bank.
The self-rescue plans include the sell-off of non-core assets, a rights issue and reductions of executive salaries.
In March, the company opened a 500 billion-won credit line with the KDB and Eximbank but the money has been almost depleted, according to KDB.
The list of assets to be sold includes the group’s material business affiliate, Doosan Solus, and its stake in construction equipment makers, such as Doosan Bobcat.
Industry sources said the sales of key affiliates would help the group secure sufficient cash for Doosan Heavy.
Doosan Bobcat is 51 percent owned by Doosan Infracore and the sale of Doosan Bobcat may fetch 1.5 trillion won. Doosan Heavy owns 38.4 percent in Doosan Infracore as well.
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 sources while weaning the country off nuclear and coal-fired plants.
Doosan Heavy posted accumulated net losses of 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.