State-run policy lender Korea Development Bank, which is a major shareholder and creditor of ailing Daewoo Shipbuilding & Marine Engineering, has reportedly found additional loss of the shipbuilding company - up to 1 trillion won - during a recent close inspection. The inspection of DSME is expected to be completed within this week.
"As the KDB has closely looked into the management situation of the shipbuilder, it is likely that the loss size of the firm would be larger than the previously announced," said one government official, declining to be identified.
Creditors of DSME including KDB and the Export-Import Bank of Korea have recently carried out an inspection to assess additional loses of DSME, the nation’s third-biggest shipbuilder. Market observers said if the loss occurred on foreign subsidiaries are applied, the additional loss can hit 1 trillion won.
Korea Development Bank Chairman Hong Ki-taek said during a recent parliamentary inspection of the administration, "Although I cannot confirm, there is a possibility of an additional loss (of DSME)."
When the accurate loss size is fixed through the joint inspection of the government and KDB, the government is set to announce the recovery plan of the firm later this month.
Kim Hong-gyun, an analyst of Dongbu Investment & Securities, said, "During the inspection of DSME, the possibility that additional loss was raised. That loss appeared to come from labor restructuring, subsidiaries and marine facilities."
With uncertainty still remain with the possibility of additional loss, he revised down the share price from current 8,500 won to 7,100 won.
