This image provided by Hanwha Group shows its corporate headquarters in central Seoul.
SEOUL, May 23 (Korea Bizwire) — Major South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co. (DSME) was rebranded as Hanwha Ocean Co. on Tuesday, opening a new era as a unit of Hanwha Group, the seventh-largest conglomerate in the country.
The embattled shipyard also appointed Kwon Hyuk-woong, president of Hanwha’s support division, as its new CEO and picked its new management at an extraordinary shareholders meeting.
Kim Dong-kwan, the de facto heir of Hanwha, will serve as a non-executive director on the board and participate in the management.
Five Hanwha affiliates, including Hanwha Aerospace Co. and Hanwha Systems Co., took part in DSME’s 2 trillion-won (US$1.52 billion) rights offering and became the controlling shareholder with a 49.3 percent stake in the shipbuilder.
“We will build Hanwha Ocean into a sustainable, eco-friendly technology company, a global innovation leader with the world’s best competitiveness that can generate stable profits under any circumstances,” Kwon said in a message to his employees.
“I will do my best to ensure that my years of experience in various industries of Hanwha Group will help Hanwha Ocean take a new leap forward,” Kwon said.
It marked the second time in 45 years that DSME, the world’s fourth-largest shipbuilder, has undergone a name change. The previous one took place in 1978, when it was taken over by now-defunct Daewoo Group.
The move came a month after South Korea’s antitrust watchdog conditionally approved Hanwha’s acquisition of DSME, removing the last hurdle for Hanwha’s push to become a global leader in the defense and energy sector.
Hanwha is required to report to the Fair Trade Commission every six months for the next three years on measures it takes not to discriminate against other rivals in the pricing of equipment for military vessels.
Hanwha had earlier received the green light from other foreign anti-competition authorities in six other countries and the European Union.
This photo shows the Okpo shipyard of Daewoo Shipbuilding and Marine Engineering Co. in Geoje, South Gyeongsang Province, southeastern South Korea. (Yonhap)
Following DSME’s name change and selection of new management, Hanwha is poised to take part in the shipbuilder’s 2 trillion-won (US$1.52 billion) rights offering to acquire a 49.3 percent stake and managerial control.
The takeover would mean the end of a long debt rescheduling program for DSME that dated back to 2001. Hanwha tried to buy DSME in 2008 for 6.32 trillion won, but it fell through due to the global financial crisis.
Hanwha has vowed to turn the shipbuilder into one of the most innovative firms by combining Hanwha’s defense capabilities with its edge in design and shipbuilding.
It has also pledged efforts to integrate its global capabilities covering “space, ground and sea,” at a time when global demand for Korean weapons systems is gaining traction amid geopolitical uncertainties.
Hanwha is further expected to ramp up efforts to turn around the loss-making shipbuilder that has been hemorrhaging in recent years on rising labor and materials costs.
DSME registered an operating loss of 62.8 billion won in the first quarter of this year after posting a cumulative loss of 3.4 trillion won for the past two years. Its debt ratio came to 1,542.4 percent at the end of last year.
(Yonhap)
