Romania’s largest shipyard faces liquidation in wake of DSME’s demise

Seoul: Financially troubled Korean shipbuilding giant Daewoo Shipbuilding & Marine Engineering (DSME) will be forced to liquidate its overseas subsidiaries including Daewoo Mangalia Heavy Industries, Romania’s largest shipyard, and DeWind, DSME’s largest creditor, Korea Development Bank (KDB) has warned.

KDB said that with DSME likely to report a KRW3trn loss for the second quarter, overseas units would have to be abandoned as part of a massive corporate shakeup at the world’s third largest shipbuilder. DSME’s huge losses related primarily to its heavy offshore exposure.

“Daewoo Mangalia and DeWind are unable to continue as going concerns and need liquidation,” KDB said in a report earlier this week.

DSME has a 51% stake in Mangalia, a yard it bought into 18 years ago. The Romanian government holds the remainder. Although it used to build a number of boxships orders there have dried up, and debts vastly outweigh its assets. It remains unclear if the Romanian government will step in to take over the yard when DSME quits.

DSME will also offload DeWind, a Texas based wond power firm it acquired six years ago.

KDB has also revealed it has stepped in recently to provide refund guarantees for the eleven 19,630 teu ships Maersk Line has ordered at DSME.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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