At the behest of South Korea’s deputy prime minister a number of the nation’s top financial institutions have come together to provide up to $5bn in refund guarantees for under fire shipyard Daewoo Shipbuilding & Marine Engineering (DSME).
The yard has posted dramatic losses this year – KRW3.03trn ($2.7bn) in the last quarter alone and is expected to report a KRW1trn loss in the third quarter.
Choi Kyoung-Hwan, South Korea’s deputy prime minister, convened a meeting of leading banks and financial institutions this morning to come up with more urgently needed short term capital for the shipbuilder.
Korea Development Bank, DSME’s main creditor, will provide most of the funding.
A management recovery plan for DSME is likely to be revealed as early as tomorrow.