DSME Creditors Mull Equity Swap
Creditors of Daewoo Shipbuilding & Marine Engineering (DSME) are set to announce a debt-for-equity swap and other measures, worth 3 trillion won (US$2.62 billion), reports Yonhap.
Korea Development Bank (KDB), a main creditor of DSME, said that the bank will accept debt-to-equity swaps worth at least 1.6 trillion won ($1.4 billion) to keep the company operating with sufficient financial liquidity.
KDB along with the other creditor Export-Import Bank of Korea (EXIM Bank) would provide a combined 4.2 trillion won worth of financial aid to Daewoo Shipbuilding, which breaks down to 2.6 trillion won from KDB and 1.6 trillion won from the other lender.
The financial support includes a debt-for-equity swap and the purchase of stocks to be issued by the shipbuilder.
"The two lenders are working to finalize the detailed plan," said an industry source. "But they have to narrow differences on the amount that they should chip in."
DSME is expected to face significant headwinds next year, as large amounts of corporate bonds are set to mature that year in addition to an anticipated decline in new orders.