FSC Denies Mergers Between Big Three Shipbuilders
The chairman of South Korea's Financial Services Commission, Yim Jong-Yong, reiterated that Daewoo Shipbuilding and Marine Engineering (DSME) would not be merged with Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI), according to a report in Korea Times.
The Big Three companies are all under restructuring and a potential 'big deal' will harm all of them, said Yim.
A precondition for a big deal is all of those companies undergo restructuring thoroughly and stand on their own. However, they are not in such a condition, he added.
Yim said the FSC came to the assumption that the global shipbuilding industry will recover in 2018, thus it has to keep DSME afloat, not dissolve it or let it go bankrupt.
DSME lost roughly $1 billion in the first half of 2016, and it is struggling to cut costs. As part of its restructuring efforts, it is reducing payroll costs through attrition, layoffs, early retirement and furloughs.
According to Yonhap, the ship builder's 4,700 office employees would begin rotating through periods of unpaid leave. The first batch of 300 personnel will have one month off starting in January.