S.Korea Announces $690M Shipping Aid
South Korea' Financial Services Commission has announced 820 billion won ($690 million) in funding to help modernize aging passenger boats and cargo ships.According to a Yonhap, the package is meant to help smaller shipping companies build 59 new ships -- 21 passenger boats and 38 cargo vessels.The Financial Services Commission announced that shipping companies will be reimbursed for up to 60 percent of the cost of the new vessels, and South Korea's state-run Korea Ocean Business Corp. will guarantee more than 95 percent of the loans.The Korea Development Bank will also fund 20 percent of the cost needed for building a ship.According to the report…
Hyundai Seeks EU's Ok to Acquire Daewoo
South Korea’s leading shipbuilding conglomerate Hyundai Heavy Industries (HHI) Group has submitted an application to the European Union for approval for its takeover of the compatriot shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME).According a Yonhap report, HHI informed that the submission will be reviewed by anti-trust authorities at the European Commission, expecting the results of their call in 2020.Hyundai Heavy has been taking prerequisite steps since April to apply for the EU’s mergers and acquisitions approval.In March, Hyundai Heavy signed a formal deal, worth an estimated 2 trillion won (US$1.7 billion) to buy its smaller local rival from the state-run Korea Development Bank (KDB).
HHI Q3 Profit Down 38.3%
South Korea’s Hyundai Heavy Industries Group said that its its consolidated operating income shrink 38.3% to 219.6 billion won ($187.7 million) in the July-September quarter against a year-ago period.Its net profit plunged 72% on year amid weak demand for ships and oil rigs.The business ranging from shipbuilding to oil refining took a hit from a slowdown in global economy, HHI said.The group, however, managed to show improvement in the bottom-line against the previous quarter. Its operating profit grew 8.8 percent against the second quarter despite a 4.3 percent fall in sales.In June, HHI was split into two entities — KSOE and a reorganized…
LNG-Ship Orders to Dominate Newbuilds in 2025
About 60.3 percent of the world’s ship orders are projected to be for liquefied natural gas (LNG)-fueled vessels by 2025."Ships powered by LNG are expected to account for six out of 10 new vessel orders in six years due to toughened environmental standards," said a report in Pulse News.A study report released by Korea Development Bank and Korea Trade-Investment Promotion Agency said that that as many as 1,962 new LNG carriers would be built by 2025. It also expected demand for LNG bunkering vessels to jump more than tenfold, from 313,000 tons in 2016 to 3.2 million tons in 2030.On condition that Korean shipbuilders would be responsible for building more than 60 percent of the world’s large LNG-fueled vessels…
HMM Names Jae-hoon Bae As New CEO
South Korean container line Hyundai Merchant Marine (HMM) has announced that its board of directors had approved the hiring of Jae-hoon Bae as president and chief executive officer (CEO).The CEO recommendation committee led by Korea Development Bank, selected Bae as the final candidate for the next HMM CEO following a comprehensive candidate examination.Before his formal appointment, Bae came to the office to meet HMM’s senior executives and thoroughly checked current and future business conditions for the company.HMM official said in a press statement, “Bae, an expert in logistics who successfully served as CEO of Pantos Logistics for six years…
HHI Group Inks Deal to Acquire DSME
Hyundai Heavy Industries (HHI) Group and Korea Development Bank (KDB) signed on Friday a definitive agreement to acquire Daewoo Shipbuilding & Marine Engineering (DSME), in the presence of Kwon Oh-gap, Vice Chairman & CEO of HHI Holdings; Ka Sam-hyun, President & CEO of HHI; and Lee Dong-gull, Chairman & CEO of KDB.Under this definitive agreement that builds on the heads of agreement signed between HHI and KDB on January 31, 2019, KDB will make a contribution-in-kind to Korea Shipbuilding & Offshore Engineering (KSOE…
DSME Workers to Strike Against HHI Takeover
Workers at South Korea's Daewoo Shipbuilding & Marine Engineering (DSME) voted on February 19 to strike to oppose Hyundai Heavy Industries (HHI)’ proposed takeover.According to labour union, the approval for the proposed strike heralds a bumpy road for a mega deal between HHI and the state-run Korea Development Bank (KDB).The decision to go on strike was supported by a majority of DSME workers in a meeting on February 19, Yonhap reported citing the workers’ 5,600-member union. The union said the precise date for the strike would be determined at a later point in time.Reports of potential strikes emerged earlier this month after Hyundai’s plans to acquire DSME were revealed in January 2019. KDB, a state policy lender which has a controlling 55.7 percent stake in the Daewoo shipyard.
SHI Turned Down Offer to Buy DSME
Samsung Heavy Industries turned down an offer to take over rival shipbuilder Daewoo Shipbuilding & Marine Engineering, the top shareholder of Daewoo said on Tuesday.State-funded Korea Development Bank (KDB), which holds a 56 percent stake in Daewoo, said it aims to sign a deal to sell the shipbuilder to sole bidder Hyundai Heavy Industries once its board approves it in early March.Hyundai Heavy, the world's biggest shipbuilding group, announced a share swap deal worth 2.1 trillion…
World's Largest Shipbuilders in $2 Bln Mega-merger
Resulting entity would control about 20 pct of global market; Daewoo shares rally 22 pct; Hyundai Heavy shares fall.Hyundai Heavy Industries, the world's biggest shipbuilding group, has announced a share swap deal worth 2.1 trillion won ($1.98 billion) to take over second-ranked Daewoo and create a global heavyweight controlling over 20 percent of the market.The move comes as the worldwide shipbuilding sector recovers from a global economic downturn that led to massive losses…
Hyundai Heavy Seeks to Acquire DSME
South Korea's "Big Three" shipbuilders may soon become the "Big Two". South Korea’s Hyundai Heavy Industries (HHI) has expressed interest to buy its rival Daewoo Shipbuilding & Marine Engineering (DSME), the local media has reported.The world’s biggest shipbuilder plans to buy a majority stake in in second-ranked rival from the state-run Korea Development Bank (KDB), WSJ reported quoting people directly involved in the matter.The move would consolidate HHI's position as the top South Korean shipbuilder and create a new industry giant.According to the report, a merger between the world’s two biggest shipyards has been in the works for about a year.
Hyundai Heavy Mulls Stake in rival Daewoo
South Korea's Hyundai Heavy Industries Group, the world's biggest shipbuilder, is interested in buying a stake in second-ranked rival Daewoo Shipbuilding & Marine Engineering, a Hyundai official told Reuters on Wednesday.The comments follow the group's holding firm saying on Monday it planned to sell part of its stake in refiner Hyundai Oilbank to Saudi Aramco for as much as 1.8 trillion won.State-funded Korea Development Bank (KDB) holds a 55.7 percent stake worth 2.16 trillion won ($1.94 billion) as of Wednesday's closing price in Daewoo."Hyundai Heavy held talks to buy the Daewoo stake," th
Empty Shipyard: "Hyundai Town" Grapples with Uncertain Future
Hyundai has outsized influence over town's economy, population; Ulsan could be South Korea's Rust Belt in the making.When Lee Dong-hee came to Ulsan to work for Hyundai Heavy Industries five years ago, shipyards in the city known as Hyundai Town operated day and night and workers could make triple South Korea's annual average salary.But the 52-year-old was laid off in January, joining some 27,000 workers and subcontractors who lost their jobs at Hyundai Heavy between 2015 and 2017 as ship orders plunged.To support their family, Lee's wife took a minimum wage job at a Hyundai Motor supplier.
Hyundai Merchant Marine to Say Good Bye to 2M Alliance?
South Korea's largest shipping firm Hyundai Merchant Marine (HMM) is likely to part ways with the 2M Alliance which will expire in April 2020 and join a new ocean alliance said a local media report.According to a report in Business Korea, the 2M Alliance (consists of Maersk Line and MSC) is disadvantageous to HMM as it is not a full member of the alliance. HMM's status fell as the 2M Alliance inked a partnership deal with Israel's Zim Integrated Shipping Services, the report said.Under an agreement signed in 2016 2M agreed that it would accept HMM as a full membership company based on an assessment of HMM’s financial structure and liquidity improvement.The report quoting industry analysts said that given current situations into account…
'Hyundai Town' Grapples with Slowed Shipyard and Grim Future
When Lee Dong-hee came to Ulsan to work for Hyundai Heavy Industries five years ago, shipyards in the city known as Hyundai Town operated day and night and workers could make triple South Korea's annual average salary.But the 52-year-old was laid off in January, joining some 27,000 workers and subcontractors who lost their jobs at Hyundai Heavy between 2015 and 2017 as ship orders plunged.To support their family, Lee's wife took a minimum wage job at a Hyundai Motor supplier.
STX Shipbuilding Stages Strike
The trade union workers of South Korea's STX Offshore & Shipbuilding Co. said Sunday they will stage a strike starting this week to protest the company's self-rescue plan, reports Yonhap. According to Korean media reports, the union would organize the strike action this week to express its disagreement with the company's planned restructuring program as it does not guarantee workers’ jobs. Starting today (Monday) 8:00 a.m., the union said 700 workers will walk out and called on the company to scrap the planned layoff of workers. "We will carry out a full strike for the time being, and hold protests and rallies to have the people become aware of unfairness surrounding the planned layoff," a union official said.
South Korea Restuctures Mid-Sized Shipbuilders
The South Korean government decided to restructure two financially-troubled mid-sized shipbuilders, said a report in Business Korea. While filing for court receivership for the debt-ridden Sungdong Shipbuilding, the government has decided to save STX Offshore and Shipbuilding Co. on condition of slashing 75 percent of its production workforce. The two shipbuilders are heavily indebted to Korea's two state-run banks, as they have struggled with snowballing losses amid unfavorable oil prices and the worldwide industry downturn. According to the report, the government held a ministerial meeting to discuss ways to strengthen the industrial competitiveness and announce its restructuring plans for mid-size shipbuilders.
STX Corp to Be Sold to Chinese Firm
AFC Korea, a subsidiary of Chinese private equity fund AFC, has been selected as the preferred bidder for cash-strapped STX Corp, according to a Business Korea report. AFC Korea has reportedly offered a price tag above 70 billion won (US$65.62 billion) for an 86.28 percent stake owned by STX creditors. STX creditors include Korea Development Bank (KDB), which holds a 39.59 percent stake, and NongHyup, which has 10.07 percent. AFC beat three other potential bidders including Pan Ocean, which was once a part of STX, and textile manufacturer Global SAE-A. According to Business Korea report, CEO of the company Hong Ra-jung is raising 100 billion won (US$93.23 million) worth of project fund to acquire STX.
Former Chief of Daewoo Shipbuilding Gets 6 Years in Jail
Former Daewoo Shipbuilding & Marine Engineering (DSME) boss Nam Sang-tae sentenced to six years in prison by Korean court for embezzlement and bribery, Yonhap reported. The report said that the Seoul Central District Court handed down the guilty verdict to Nam Sang-tae, 67, convicting him of accounting fraud, embezzlement, breach of duty and bribery. The court ordered him to forfeit 880 million won (US$806,000). Prosecutors have demanded an eight-year prison term. The court said in the ruling: "The defendant neglected his responsibility as the chief of Daewoo Shipbuilding and sought his personal gains using his authority and power. Daewoo Shipbuilding is 57 percent owned by the state-run lender Korea Development Bank (KDB).
Hyundai Merchant Marine Seeks USD 8.9 bln from KDB
Hyundai Merchant Marine (HMM) requested the Korea Development Bank (KDB) to support with a total of 9.9 trillion won (US$8.9 billion) in funds until 2022 to grow into the 8th largest global shipping company in the future, Business Korea reported. HMM had asked consulting firm AT Kearney to estimate how much support funds for HMM would be needed. AT Kearney calculated that a total of 9.9 trillion won will be needed, including 5.6 trillion won (US$5.0 billion) for large container ships, 3.3 trillion won (US$2.9 billion) for container boxes (2 million won or US$1,800 for each box) and 1 trillion won (US$900 million) for the takeover of overseas terminals.
DSME Deal Non-starter
The creditors of Daewoo Shipbuilding & Marine Engineering (DSME) still remain undecided over afor the shipyard's latest deal, further complicating troubles for one of the country's major shipyards, Yonhap reported. DSME clinched a US$250 million deal to build three very large crude carriers (VLCCs) on April 4. Under the deal with Maran Tankers Management, a unit of Greece's largest shipper Angelicoussis Shipping Group, Daewoo Shipbuilding will deliver the 318,000-ton VLCCs by 2018. The deal came as the shipyard is suffering from a sharp decline in new orders amid a protracted industrywide slump. "We are still talking about (this), and the state-run creditors and commercial lenders have to narrow their differences on the terms," a source said, asking not to be named.
Daewoo Shipbuilding unlocks $2.6 bln Bailout
Bondholders at final meetings agree to debt-to-equity swap; shipbuilder needs about $400 mln in operating funds by April-end. South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd has won near unanimous agreement from bondholders to swap their debt for equity, meeting a condition that unlocks a $2.6 billion bank bailout for the world's biggest shipbuilder. Daewoo won approval from over 96 percent of bondholders at two meetings on Tuesday and three on Monday, with attendance exceeding 78 percent. The meetings came shortly after the shipbuilder won the approval of its biggest bondholder, the National Pension Service. "We will normalise the company as soon as possible through bone-grinding effort…
Daewoo Shipbuilding Bondholders Okay Bailout Plan
Debt-to-equity swap plan is condition of $2.6 bln bailout. South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd on Monday won near unanimous approval for a debt-to-equity swap plan in the first three of five bondholder meetings, as the world's largest shipbuilder battles to stay afloat. The votes were held hours after Daewoo's biggest bondholder, the National Pension Service (NPS), said it had agreed to the proposal. That move made it likely other bondholders would follow suit, creditor bank officials said, allowing the shipbuilder to meet conditions of a $2.6 billion bank bailout. The shipbuilder has been pushed to the brink by the impact of historically low oil prices, which caused delays in payments for complex offshore facilities.
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…