April 24, 2024

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[THE INVESTOR] Daewoo Shipbuilding & Marine Engineering, a major shipyard in South Korea, has to pay off or refinance up to 1 trillion won (US$869 million) worth of debt that mature this year, but the shipbuilder‘s financial status is not good enough to deal with the situation, industry sources said on Feb. 14.

According to the sources, DSME has 440 billion won worth of debt scheduled to be due in April, 300 billion won in July and 200 billion won in November. But the shipyard doesn’t have enough cash to pay off such maturing debt.

DSME has not received any new orders so far this year, although it has recently signed a letter of intent with a US firm to build up to seven floating storage and regasification units. Under the deal with Excelerate Energy, DSME will receive an order to build one FSRU for the US energy firm in the second quarter of the year, whose value will be between some US$200 and US$300 million. But the official contract is expected to be finalized in April.

Adding to its difficulty is that it is facing a delay in receiving 1 trillion won in payment from an Angola oil firm for the delivery of two drill ships. DSME and Sonangol have been negotiating to resolve the delayed payment since last year, but the delivery was pushed back to this year, according to the sources. The delivery of the two drill ships was originally scheduled for June and July last year. The payment is one of the key resources that DSME needs to repay its maturing debts.

(theinvestor@heraldcorp.com)