April 18, 2024

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[THE INVESTOR] Daewoo Shipbuilding & Marine Engineering Co., a troubled major shipyard here, is set to restart its stock trading on the local stock market this week after a 16-month suspension, industry sources said on Oct. 2.

Trading Daewoo Shipbuilding shares has been halted since July last year due to its impaired capital base, and the shipyard was given a one-year rehabilitation period to improve its financial status for the resumption of stock trading.

Last week, the Korea Exchange, the operator of the local stock market, gave permission for the shipyard‘s stocks to be bought and sold from Oct. 30 citing its improved financial status and proper accounting audit results.

Daewoo Shipbuilding posted a profit for the second straight quarter in the second quarter, largely thanks to cost-cutting measures and increased delivery of offshore facilities.

In the first half of the year, Daewoo Shipbuilding racked up a net profit of 1.49 trillion won (US$1.32 billion) and an operating income of 888 billion won.

The shipyard is also expected to remain in the black in the third quarter.

In March, its creditors, led by Korea Development Bank (KDB), announced a fresh rescue package worth 6.7 trillion won for the shipyard, including a debt-for-equity swap.

Daewoo Shipbuilding’s base stock price is set at 44,800 won after a 10-to-1 capital reduction, but market experts expect to see the shipyard‘s stock price to start at between 10,000 and 20,000 won as stocks swapped with debts will be released.

By Park Ga-young (gypark@heraldcorp.com)