Workers assemble a gas turbine at the Doosan Heavy Industries & Construction Co’s plant in Changwon, about 400 kilometers southeast of Seoul. (image: Doosan Heavy Industries & Construction)
SEOUL, April 27 (Korea Bizwire) — The state-run Korea Development Bank (KDB) and Export-Import Bank of Korea (Eximbank) said Monday they are considering providing additional financial assistance worth 800 billion won (US$649.8 million) to Doosan Heavy Industries & Construction Co. in the latest move to help normalize the nation’s largest power equipment maker.
“We decided to accept Doosan Heavy’s final self-rescue plans,” KDB and Eximbank said in a joint statement.
A KDB official said Doosan Heavy plans to use about 500 billion won out of the 800 billion won in paying back bonds with warrants maturing in May.
The move comes after Doosan Group submitted Doosan Heavy’s final self-rescue plans worth more than 3 trillion won to the creditors.
The self-rescue plans include the sell-off of its non-core assets, a rights issue and salary reductions of executives.
In March, the company opened a 500 billion-won credit line with the KDB and Eximbank, respectively, but the money is almost depleted, according to KDB.
Last week, Eximbank converted $500 million worth of dollar-denominated debt sold by Doosan Heavy into the loans, as the power equipment maker cannot repay the debt set to mature this week.
Eximbank delivered a payment guarantee when Doosan Heavy issued dollar-denominated corporate bonds in April 2015, but 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 energy sources while weaning the country off nuclear and coal-fired plants.
Doosan Heavy posted accumulated net losses worth 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.
Doosan Heavy said about 650 out of its total of 6,700 employees have opted to leave the company in its first retirement program in five years as part of its efforts to cut costs amid dwindling orders.
Shares in Doosan Heavy rose 2.27 percent to 3,835 won, outperforming the broader KOSPI’s 1.79 percent gain.
(Yonhap)
