After collecting the necessary consents for its rescue plan, the financially troubled shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) filed for a court approval for debt rescheduling on April 20, Yonhap News Agency said.
An approval from the South Korea’s court would pave the way for the shipbuilder’s much needed financial boost of KRW 2.9 trillion, proposed by its main creditors Korea Development Bank (KDB) and Export-Import Bank of Korea (KEXIM).
The court is expected to make the decision on the matter in two weeks. If all of the necessary approvals are granted, the financing could be made in early May, Yonhap informed.
DSME’s main debt holder, National Pension Service (NPS), which holds some 30 percent of the company’s corporate bonds, approved of the debt rescheduling on April 17. Later the same day, the company’s remaining investors gave their nod to the debt rescheduling proposal.
The latest restructuring plan, revealed in late March 2017, sets out three key principles – debt restructuring should come first, financial assistance should follow later, and all stakeholders should bear the burden of losses.
Under the new measures, half of the shipyard’s corporate bonds and commercial papers would be converted into equity with the rest being rolled over.
In October 2015, KDB and KEXIM injected a KRW 4.2 trillion rescue package into DSME, however, despite the financial aid and the company’s stringent self-rescue efforts, the shipbuilder suffered a net loss of KRW 2.7 trillion last year as its debt ratio soared to 2,732%.