NPS requests more information ahead of bailout support decision for Daewoo Shipbuilding


Another massive bailout scheme is on the table
for one of Korea’s biggest shipbuilders. But whether they will get the financial help
they need depends largely on one of its biggest bondholders — the National Pension Service. Oh Soo-young updates us on efforts to revive
the sector that was once a key engine of the nation’s economy. Will the world’s second-largest shipbuilder
be granted another lifeline? The National Pension Service has requested
more information from Daewoo Shipbuilding and Marine Engineering,… ahead of a meeting
on Friday where it will discuss whether or not to partake in a bailout scheme. The six-billion dollar rescue package is largely
backed by the state-run Korea Development Bank- – the company’s biggest shareholder
and creditor. Its success largely relies on securing an
agreement from other corporate bondholders on debt-to-equity swaps and rollovers. The proposal suggests out of a total of 3-point-4
billion dollars in debt, 2-point-6 billion be converted into debt-to-equity swaps with
a ratio of 50 or 80 percent. The rest would be given a grace period of
three to five years. All eyes are on the National Pension Service–Daewoo’s
biggest bondholder. It holds 43 percent of corporate bonds maturing
next month… worth around 170 million U.S. dollars. Watchers believe the agency will likely go
ahead with the plan,… considering past investments as sunk costs,… but it is expected to tread
lightly. “NPS is feeling the heat,… due to the Samsung
merger scandal where the final decision was reached without following principles and was
affected by external influence. So, if it takes the initiative to unveil its
transparent decision-making process in this case, it would help dispel public distrust
of the pension service. Requiring extra data from Daewoo can be seen
as a part of that effort.” Daewoo is currently the world’s second largest
shipbuilder by revenue,… but due to the fall in global demand for vessels coupled
with other industry-wide difficulties,… the company’s
finances are barely keeping afloat. It has already received three-point-six-eight
billion dollars in a rescue plan in 2015 but has failed to beat its liquidity crisis. Without the latest bailout scheme, it will
not be able to pay back the 395 million dollars worth of bonds set to mature on April 21st. Daewoo Shipbuilding’s creditors will sit down
mid-April to discuss the debt-to-equity swap and rollover plan. If the proposal falls through, the company
will likely have no choice but to enter court receivership.” Oh Soo-young, Arirang News.”

2 thoughts on “NPS requests more information ahead of bailout support decision for Daewoo Shipbuilding

  1. Dont give this kinda power to your banks. Bankruptcy is sad, but this will just make the industry and banking "even more too big to fail"

    Save such money to create public works programs and address income inequality.

  2. We sold risky bonds and purchased bonds we couldn't pay back. So save us! Cries the chaebols and bankers!

    While average people are scrapping by and sold this fantasy of an over priced and predatory, yet crappy education.

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