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.