Creditors of Daewoo Shipbuilding & Marine Engineering Co. will pour 4.2 trillion won ($3.68 billion) into the ailing shipyard to help it get back on track, the main creditor bank said Thursday.

The cash injection is part of a comprehensive plan crafted by the main creditor Korea Development Bank and others to rescue the troubled shipbuilder. The plan also includes restructuring measures and, in the long run, a privatization scheme.

Daewoo, the world’s top shipbuilder by order backlogs, has faced a major crisis this year due to the loss-making offshore facilities projects and the downturn in the overall shipbuilding sectors amid the global recession.

In the third quarter alone, Daewoo’s net loss came in at 1.36 trillion won, compared to a net profit of 10 billion won a year earlier. The poor performance came after the firm suffered a disastrous 3.03 trillion loss in the second quarter, with the full-year loss feared to exceed 5 trillion won.

“We, along with the Export-Import Bank of Korea, will provide Daewoo with the liquidity in the form of loans and a capital increase,” KDB Vice Chairman Jung Yong-ho said during a press briefing. “The amount was decided in consideration of the maximum shortfall Daewoo is forecast to suffer in the first half of next year.”

The rescue funds will be provided next month after the signing of a memorandum of understanding between the creditors and the shipbuilder for the normalization process, according to KDB.

The move is expected to bring Daewoo’s debt ratio below 500 percent by the end of next year, which was feared to skyrocket to 4,000 percent.

In return for the bailout, Daewoo will be required to take tough self-rescue measures, including layoffs and asset sales, KDB said.

Starting around the end of next year, the company will cut back on the scale of its manpower by up to 10,000 employees in phases and businesses, while reducing the share of its money-losing offshore plant construction to below 40 percent from the current level of more than 50 percent.

The shipbuilder will also raise 1.85 trillion won through the sell-off of its non-core assets, among others, according to the creditor.

“As the fundamental solution to normalize the firm, we will push for its privatization as soon as possible,” Jung said. “As Daewoo is armed with the world-class technologies and competitiveness, the proactive risk management and concentration strategies will bring it back to normal.

The company is projected to make an operating income next year, and to fully stand on its own feet by around 2019, according to KDB.

Earlier this week, the shipbuilder’s unionized workers submitted written consent agreeing to accept painstaking measures including a wage freeze and no walkouts while the firm goes through a normalization process. (Yonhap)