DSME's Bailout Plan Cleared by Pension Fund
South Korea’s National Pension Service (NPS) agreed to a restructuring of bonds issued by Daewoo Shipbuilding & Marine Engineering (DSME).
Reuters reported that this move is expected to help the world’s largest shipbuilder tide over a financial crisis. NPS stated that accepting the debt restructuring will be more advantageous to improve the fund's returns.
The finance crunch hit DSME will likely get more time to make payments on bonds that are due this month.
NPS is the biggest holder of the debt. It is is Daewoo's single-largest bondholder, with about 390 billion won ($343.5 million) in bonds, Yonhap reported.
The government of South Korea suggested in March that bondholders, which hold about 1.5 trillion won of Daewoo debt, agree to a 50 percent debt-to-equity swap and a three-year grace period on the remaining, as a condition for state banks to provide a fresh $2.6 billion bailout to save the shipbuilder.
Meanwhile, NPS along with the main creditor of DSME state-run Korea Development Bank (KDB) expected a "good result" in talks with a major bondholder that will help the shipyard stay afloat.