September 27, 2022 11:14
Debt-ridden Daewoo Shipbuilding and Marine Engineering will be sold to Hanwha Group for W2 trillion (US$1=W1,431).
State-run Korea Development Bank, DSME's main creditor, said Monday that Hanwha has been chosen as the preferred bidder for the shipbuilder.
DSME entered a debt-restructuring program in 1999 after the spectacular implosion of parent Daewoo Group during the Asian financial crisis. KDB became DSME's biggest shareholder when its loans were converted into equity in 2000.
Earlier, Hanwha failed in an attempt to acquire DSME for around W6 trillion back in 2009. Under the new deal, Hanwha will participate in a W2 trillion capital increase of DSME to acquire a 49.3 percent stake, while KDB's 55.7 percent stake will fall to 28.2 percent.
KDB chairman Kang Seog-hoon said, "Audit results show that DSME has a low chance of normalizing operations on its own, so we decided that finding a capable new owner from the private sector would be a fundamental solution."
DSME's financial condition deteriorated in 2015, when the shipbuilder was caught window-dressing accounts, and the government pumped in W7.1 trillion in support over the next seven years. But the massive infusion of taxpayers' money was not enough to stop the hemorrhaging.
A final decision will be made by late December after due diligence and other steps are completed.
Hanwha decided to take another shot at acquiring DSME because the explosives and chemicals maker aspires to becoming Korea's version of U.S. defense giant Lockheed Martin. Hanwha said it can achieve "huge synergy" by combining its land and space weapons capabilities with DSME's capacity to manufacture warships.
- Copyright © Chosunilbo & Chosun.com