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The Korea Herald
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THE INVESTOR
March 28, 2024

Industrials

DSME struggles with new orders as bailout uncertainties rise

  • PUBLISHED :March 28, 2017 - 10:41
  • UPDATED :March 28, 2017 - 10:41
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[THE INVESTOR] Daewoo Shipbuilding & Marine Engineering is facing difficulties securing new orders amid increasing uncertainties over creditors’ rescue package, industry sources said on March 28.

According to the sources, the major South Korean shipyard has been widely expected to finalize two deals this month and early next month. The shipyard, the world’s largest by order backlog, is scheduled to sign a US$250 million deal this month at the earliest to build three very large crude carriers.

Also, DSME has been set to finalize a deal to build up to seven floating storage and regasification units early next month at the earliest as well.

DSME did not reveal the value of the deal, but industry sources estimated it may be worth US$1.6 billion.

Under the rescue package, DSME will receive new loans worth 2.9 trillion won (US$2.60 billion), if lenders and bondholders agree to swap 2.9 trillion won of debt for new shares in the shipbuilder.

Unless they agree on the debt-equity swap plan, DSME will be placed under a new corporate rehabilitation program, which is a combination of a debt workout and court receivership, the creditors said.

DSME plans to hold a meeting for its bondholders on April 17-18 but getting an agreement from them for the debt-equity swap may not be easy.

By Alex Lee and newswires (alexlee@heraldcorp.com)

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