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Creditors of Daewoo Shipbuilding to unveil rescue plan this week

The government and the main creditor of Daewoo Shipbuilding & Marine Engineering Co. said Tuesday that they will soon announce a set of measures to help save the shipyard, whose annual operating loss may exceed 5 trillion won ($4.41 trillion).

The measures, expected to include up to 4.3 trillion won in additional funds for the troubled shipbuilder, will be announced early Thursday, the state-run Korea Development Bank said in a released statement.

Just one day earlier, unionized workers of Daewoo Shipbuilding submitted written consent agreeing to a wage freeze for the entire duration of what the main creditor has called the normalization process.

The world's largest shipbuilder, in terms of order backlog, posted an operating loss of 3.03 trillion won in the second quarter. Informed sources have said a recent audit by KDB and other creditors may have unearthed an additional 1 trillion won in losses, with the company expected to lose another 1 trillion won in the second half of the year.

KDB and the government were originally expected to reveal their rescue plan much sooner, but they had pigeonholed the plan while demanding a written agreement from the company and its unionized workers to accept painstaking measures that restructuring will entail.

Under its written consent submitted to KDB late Monday, the labor union of Daewoo Shipbuilding also agreed to stage no walkouts during the normalization process.

Earlier reports said the rescue plan also included a $5 billion refund guarantee on advance payments to Daewoo Shipbuilding, which will allow the company to continue taking orders. (Yonhap)

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