[THE INVESTOR]  Cash-strapped Daewoo Shipbuilding & Marine Engineering on Aug. 31 said its president is visiting Europe in a bid to help dispel ship owners’ concerns over its financial health.

Daewoo Shipbuilding said CEO Jung Sung-leep left Seoul for northern Europe on Aug. 29 to hold meetings with major ship owners, during which he will brief them on the company’s current state and assure them that vessels and offshore platforms will be delivered without delay.

“Concern is growing among ship owners on news that creditors may downgrade their credit ratings on Daewoo Shipbuilding by one notch from normal,” a company official said. “The trip is designed to dissipate such concern.”

Jung will explain that ship construction is being carried out normally and there is no change in creditors’ plan to help Daewoo Shipbuilding overcome its cash crunch, the official added.

Last week, the main creditor Korea Development Bank decided to provide a short-term loan of up to 300 billion won (US$268 million) to Daewoo Shipbuilding to help it address its liquidity shortage and repay maturing debts. The shipyard is required to repay commercial papers worth 400 billion won by Sept. 9.

In the second quarter of this year, Daewoo Shipbuilding posted a net loss of 1.22 trillion won, a turnaround from a profit of 31.4 billion won three months earlier.

(theinvestor@heraldcorp.com)