Daewoo Plans To Pay Debt Early

Monday, January 22, 2001
The shipbuilding unit of South Korea's troubled Daewoo Group expects a net profit and more profitable orders in 2001 as it charts a new, independent course. Daewoo Shipbuilding & Engineering Co, split off from troubled Daewoo Heavy Industries last October, said it aimed for net profit of $156.7 million this year, buoyed by strong global orders. "It looks certain that Daewoo Shipbuilding has a great business year ahead of it," said Song Sang-hoon, analyst at Dongwon Economic Research Institute. "But it has still to calm European shipbuilders' criticism that Korean shipyards, especially Daewoo, are suspected of dumping practices."

It also plans to repay 200 billion won of debt this year to free itself from a debt restructuring program undertaken by its creditors in 1999, Daewoo officials said. "Our losses in the past stemmed from problems of other Daewoo affiliates," shipyard spokesman Kim Do-kyun said. "But we are confident of making profits from this year after cutting ties with them."

Last October, Daewoo Heavy Industries was split into three firms -- a shipbuilding unit, a heavy industries unit and a third firm to handle the former firm's debts. Daewoo Heavy made a net loss of 3.4 trillion won in the first three quarters of 2000 as it settled unpaid deals with other Daewoo firms and took up losses from its investment in bankrupt Daewoo Motor, in which it had a 49.8 percent stake. A loss of 3.97 trillion won in 1999 stemmed from similar reasons, Daewoo officials said. Daewoo Heavy, along with 11 other highly-leveraged Daewoo Group companies, was rescued by creditors in August 1999 after a recession the previous year made it impossible to operate.

"In 2000, the shipbuilding unit of Daewoo Heavy benefited from an overall shipbuilding boom for South Korean companies," said Kim of Daewoo. Daewoo received $3.3 billion in shipbuilding orders in 2000 and its order backlog, estimated at $4.5 billion, is enough to keep its shipyard fully occupied for the next two and half years, he said. It said it is now in a position to be selective in receiving orders and plans to add $2.5 billion worth of orders this year, focused on high value-added VLCC and LNG vessels. Despite the fall in new orders, it said sales would rise to 2.86 trillion won, up six percent from 2.7 trillion won a year earlier. Sales revenues usually come about two years after orders because payments are spread out over the time between the initial contract and delivery. In December, creditors led by Korea Development Bank increased paid-in capital in the shipbuilder to 992.9 billion won via 747 billion won in debt-to-equity swaps. Daewoo Shipbuilding's assets are now valued at 4.04 trillion won, against 3.05 trillion won in liabilities. Analysts said prospects for turning the company around looked bright, and would brighten further if its quest for foreign capital proved successful. The shipbuilder is negotiating a partnership with an Australian firm, and shipbuilders in Europe have expressed interest in business opportunities involving Daewoo. Part of the criticism the firm faces about what European competitors call dumping stems from loan incentives Daewoo Shipbuilding has received under its debt workout program.

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Marine Electronics

Raytheon Anschütz Succeeds in SYNTACS SAT

Raytheon Anschütz, a leading integrator of naval integrated bridge systems, has successfully completed the Sea Acceptance Test (SAT) for the Synapsis Tactical Command

IMMA App Offers Access to Maritime Medical Stores

Deteriorating seafarer health and poorly-stocked onboard medical chests are major issues concerning maritime medical practitioners, which is why the International

Available: 300 Free Systems; Wanted: 300 Ships

Which will be the first 300 ships in the world to test and validate Sea Traffic Management (STM) with updated systems free-of-charge?   As the shipping domain


BIMCO Signs New LNG And Shipbuilding Supervision Contracts

The twice yearly meeting of BIMCO’s Documentary Committee took place in Hamburg on 19 November. In his first meeting as Chairperson of the Committee, Belgium’s

Damen Marine Components Opens Jiangyin Plant

Damen Marine Components (DMC) is proud to announce the opening of its brand new facility in Jiangyin, China.Those present at the opening ceremony included CEO

Henriksen Unveils Strongest SOLAS Boat Lifting Hook

H Henriksen of Norway has received SOLAS certification for a new off-load single-point boat lifting hook capable of holding up to 22.5-tonnes. The quick release

Maritime Security Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0791 sec (13 req/sec)