SEOUL, Oct. 23 (Korea Bizwire) – As financial authorities and creditors have held off a plan to support the normalization of Daewoo Shipbuilding & Marine Engineering, the union from the Korea Development Bank (KDB) is pushing for a restructuring based on fundamentals.
KDB’s union urged Daewoo to restructure even if the companies goes under legal management, instead of shoveling sand against the tide because of pressure from the government.
Authorities and creditors were to commit to a plan to support Daewoo Shipbuilding & Marine Engineering with funds reaching four trillion won. However, after going through a meeting considering financial countermeasures, the whole thing was held off.
It was reported that the meeting concluded with the committee agreeing that Daewoo needs a detailed self-help plan and the agreement of its union first, and without these crucial elements, normalization would be difficult even with the financial support.
The KDB union also insisted that supporting Daewoo at a point when uncertainty is growing is not the sort of action a bank should take, and could lead to a bigger state of insolvency.
The union pointed out that considering the characteristics of the shipbuilding industry, which is going through a reshuffle of global competitive balance, the bank’s role in lowering production costs or concentrating on liquidity provision has limitations.
Union officials emphasized that the situation is a crisis that could push the Korean economy into danger as well as the bank itself, and in times like this bold actions based on business fundamentals are needed.
By Francine Jung (email@example.com)