Samsung shipyard secures $32 mln for debt restructuring

By Park Sae-jin Posted : May 12, 2016, 10:44 Updated : May 12, 2016, 10:44

[Courtesy of Samsung Heavy Industries]


Samsung Heavy Industries said Thursday it has secured a cash reserve of 32 million US dollars through the sale of its stake in a South Korean engine maker to ease its liquidity crisis before submitting a restructuring program to creditors.

The troubled shipyard said that the disposal of its 14.1 percent stake in Doosan Engine was made Wednesday after the market was closed. The stake was valued at 37.3 billion won ($32 million).

Samsung Heavy, one of South Korea's three largest shipbuilders, has struggled to cut its debt under pressure from creditors to roll out a self-restructuring plan that would include job cuts and the sale of real estate, equity holdings and other non-core assets.

The shipyard posted a record loss of 1.5 trillion won last year. With no fresh orders, the company's crisis has worsened this year, with its first-quarter operating profit tumbling 77 percent on-year to 6.1 billion won.

Shipbuilding has been selected by South Korean government officials and creditors as an ailing industry requiring swift and intensive restructuring to stop their woes from hurting Asia's fourth-largest economy.

Some 1,000 Samsung Heavy workers quit last year through voluntary retirement, but creditors want more before providing fresh bailout loans.

Aju News Lim Chang-won = cwlim34@ajunews.com 
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