Daewoo: creditors draw recapitalization plan

Seoul - Creditors of embattled Daewoo Shipbuilding & Marine Engineering Co. said Thursday that they have drawn up a 3.2 trillion won (US$2.78 billion) recapitalization plan in order to help the shipbuilder avert being delisted from the local stock market, but conditioned that the shipbuilder’s labor union accept the company’s large-scale restructuring scheme. Under the plans, the state-run Korea Development Bank, the main creditor for the shipbuilder, will swap its loans worth 1.8 trillion won into Daewoo Shipbuilding stock. The KDB has already conducted a debt-for-equity swap worth 400 billion won for the shipbuilder.

The other policy lender, the Export-Import Bank of Korea, will buy debts worth 1 trillion won to be sold by Daewoo Shipbuilding, which can be counted as capital, according to the plan.

The KDB-led creditors, however, stressed that the recapitalization scheme could be implemented only if the shipyard’s labor union doesn’t launch any strikes and must accept a wage freeze and a workforce reduction plan.

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