“The consulting report comes out in one or two months
“Working from a whole industry perspective”
Korea Development Bank Chairman Kang Seok-hoon announced on the 28th that “we are considering various measures, such as separate sale,” regarding the plan to normalize Daewoo Shipbuilding & Marine Engineering’s business. It opened up the possibility of privatization by splitting and selling Daewoo Shipbuilding’s defense and civil divisions.
▶July 25th of this magazine A1, page 3 Reference
Chairman Kang attended the plenary session of the National Assembly’s Political Affairs Committee on the same day and answered a question from Rep. Yoon Chang-hyeon, who asked regarding the principles of restructuring of Daewoo Shipbuilding, as follows. Chairman Kang explained, “The weakened competitiveness of Daewoo Shipbuilding is the biggest problem. He continued, “Nothing has been decided yet,” he said.
After the merger and acquisition (M&A) between Daewoo Shipbuilding and Hyundai Heavy Industries was canceled in January due to the European Union’s disapproval of the business combination, KDB entrusted an external agency with consulting to find ways to enhance Daewoo Shipbuilding’s competitiveness in February. Chairman Kang said, “The (consulting result report) was originally scheduled to come out around this time, but it is likely to be delayed by one to two months due to the subcontracting union strike, etc. I think it should be,” he said.
According to the KDB, Daewoo Shipbuilding is in a situation where business uncertainty persists due to a sharp rise in steel prices and labor costs, and prolonged sanctions once morest Russia, despite the recent brisk orders. Daewoo Shipbuilding, which posted an operating loss of 1.7 trillion won last year, is expected to turn to black this year as well. Moreover, it suffered a loss of regarding 800 billion won, including a decrease in sales, due to the strike of the subcontractor union from June 2 to the 22nd. Chairman Kang said, “The treatment of DSME has been carried out from the perspective of dealing with Daewoo Shipbuilding’s own companies. It is in progress,” he said. The Financial Services Commission also announced in its work report on the same day, “We will continue our efforts to find a private owner for the fundamental normalization of Daewoo Shipbuilding.” Meanwhile, Chairman Kang expressed his will to move forward with the issue of KDB’s relocation to Busan as soon as possible.
By Lee In-hyuk, staff reporter twopeople@hankyung.com
