The state-run Korea Development Bank (KDB) has increased its stake in the South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co. (DSME), according to a stock exchange filing.
KDB, one of DSME’s main creditors, increased its ownership in the shipbuilder from 49.74 percent to 79.04 percent through a debt to equity swap.
In November 2016, DSME’s creditors KDB and the Export-Import Bank of Korea unveiled their intentions to financially support the shipbuilder with KRW 2.8 trillion.
Under the plan, KDB intended to convert KRW 1.8 trillion of debt into equity. The bank previously converted around KRW 400 billion worth of loans into DSME stocks.
The company’s second creditor, the Export-Import Bank of Korea, was expected to buy KRW 1 trillion worth of bonds that would be sold by the shipbuilding company.
The creditors earlier said that the financial aid would be provided under the condition that the company’s labor union accepts the restructuring scheme, introduced in order to prevent the shipbuilder’s delisting from the stock market.
During the first nine months of 2016, Daewoo Shipbuilding & Marine Engineering’s net loss shrunk to KRW 1.42 trillion from a net loss of KRW 2.19 trillion reported in the nine-month period in 2015.
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