Korea Development Bank, a key creditor of Daewoo Shipbuilding & Marine Engineering Co., is expected to provide a short-term loan to the struggling shipbuilder early next month, according to KDB and the Financial Services Commission on Sunday.

The planned loan worth between 200 billion won ($178.6 million) and 300 billion won is likely to help Daewoo Shipbuilding address its liquidity shortage and repay maturing debts. 

Daewoo Shipbuilding has been under pressure to repay commercial papers worth 400 billion won by Sept. 9.

The decision by KDB to offer a loan to Daewoo Shipbuilding came after the shipbuilder announced that it will deliver two drill ships worth 1 trillion won to Angola's oil company Sonangol late next month.

The delivery of the two drill ships is expected to stave off a liquidity crisis at DSME.

"If the delivery of the drilling ships to Sonangol was completed, Daewoo Shipbuilding could buy much-needed time for normalization after escaping from critical liquidity issues," said an official at the financial industry.

Hit by a global economic slowdown and a prolonged slump in oil prices, South Korean shipbuilders, including Daewoo Shipbuilding, have been struggling with mounting losses and falling orders.

Daewoo Shipbuilding reported a net loss of 1.22 trillion won for the second quarter of this year, compared with a profit of 31.4 billion won in the previous quarter. (Yonhap)