State-run creditors of South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) will inject 4.2 trillion won (US$3.7 billion) into the ailing shipbuilder in exchange for rigorous restructuring at the financially-troubled shipbuilder, including deep job cuts and sale of its overseas subsidiaries.
The state-run Korea Development Bank (KDB), the shipbuilder's largest shareholder, held a board meeting on October 29 and announced such a bailout plan for the shipbuilder.
KDB and the state-run Export-Import Bank of Korea (KEXIM) will pump into the shipbuilder 2.6 trillion won (2 trillion won in debt-equity swaps and seasoned equity offerings and 600 billion won in new loans) and 1.6 trillion won, respectively. KDB, KEXIM and the Korea Trade Insurance Corporation (K-sure) have also agreed to provide 90 percent (30% each) of a refund guarantee (RG) on advance payments to DSME.
