State-run Korea Development Bank (KDB) has vowed to start again, and to source a local firm willing to take over Daewoo Shipbuilding & Marine Engineering (DSME) after the yard’s proposed merger with Hyundai Heavy Industries’ (HHI) was blocked by the European Union over concerns about the stranglehold the pair would hold in the construction of LNG carriers.
Lee Dong-gull, chairman of the bank, said at a press conference yesterday: “We will set out to find a new buyer willing to inject fresh finances and manage [DSME] in a responsible manner.” KDB has been the lead creditor in DSME for most of the past decade, but remains determined to privatise the yard.
Lee hit out at the EU’s decision to bar the mega merger, suggesting HHI might take legal action.
There is considerable anger in Korean shipbuilding circles that the EU blocked the HHI merger, while allowing China’s two largest state-run shipbuilding groups to come together back in 2019.
With the DSME deal off for the time being, officials at HHI are considering reopening a mothballed yard, Hyundai Gunsan, on the west coast of South Korea as it snares more orders than at any time over the past decade.
HHI began to build its Gusan yard in May 2008 at the peak of the last supercycle in shipping to go alongside other yards in the HHI empire including Hyundai Mipo and Hyundai Samho. By the time it was completed the following summer, however, the markets were in post-Lehman shock. The yard was eventually shuttered in 2017.
The Gunsan yard is enormous; spread over 1.8m sq m and features one of the world’s largest drydocks, some 700 m long with a 1,600 ton crane.