State lender Korea Development Bank (KDB) has outsourced a scheme to privatize deficit-ridden Daewoo Shipbuilding &Marine Engineering (DSME) and could seek sale in pieces to lessen the burden of the cost, according to its new chairman Kang Seog-hoon.
“We are considering various options (regarding DSME sale), including separated sales. The key issue with DSME is its weak competitiveness, and we will study various ways to improve its competitiveness,” Kang said in a response to a question from governing People Power Party lawmaker Yun Chang-hyun about KDB’s DSME sale plan during a parliamentary national policy committee meeting Thursday.
“The reorganization will consider the overall industrial competitiveness, not just the company,” he said.
The policy bank previously said it cannot separate DSME for shipbuilding and defense operation.
Outsourced consulting results have been delayed due to months-long union strike at DSME dockyard, he added.
Amid protracted strike that ended after 51 days last week, the government and KDB indicated they could let DSME go under with its debt ratio nearing default crisis ratio of 400 percent. It has incurred 7.7 trillion won ($6 billion) in cumulative losses due to lengthy shipbuilding slump and the flop in the government plan to merge the company with Hyundai Heavy Industries due to opposition from the European antitrust authority. The shipbuilder has been under KDB since the collapse of Daewoo Group in late 1990s after multiple bailouts worth 11.8 trillion won.
Kang confirmed the bank will stick to relocation to Busan despite internal protest.
DSME shares closed 2.85 percent higher at 19,850 won in Seoul trading on Friday.
Source: Hellenic Shipping News