[THE INVESTOR] Daewoo Shipbuilding and Marine Engineering will speed up its job cut plan as part of its restructuring scheme, the company said Wednesday, amid growing concerns over the company’s fate.

The ailing shipbuilder said it is pushing for a faster self-rescue plan to cut some 3,000 jobs, which would allow it to keep its total number of staff under 10,000 by the end of this year. As of June, about 12,700 workers are employed, according to DSME. 

The company initially sought to gradually cut the jobs by 2020, but it has struggled from continuous liquidity woes and a drop in orders.

It added that it would also consider selling its facilities to secure cash.

“The plan to sell the three floating docks will be finalized based on the future shipbuilding market conditions,” said the company.

DMSE already sold two out of its five floating docks earlier this year.

While speeding up its restructuring plan, the ailing company objected to the tentative results of consulting firm Mckinsey Korea’s assessment on the country’s top three shipbuilders, claiming that the assessment was made based on the wrong premise.

Mckinsey Korea is currently wrapping up its assessment which will be used as the government’s guideline for revamping the struggling shipbuilding industry later this month. The assessment was commissioned by the shipyards.

While the official results have not been released yet, the preliminary assessment reportedly said that DSME is unable to survive on its own due to lack of the 3.3 trillion won ($2.9 billion) needed by 2020. The figure was calculated based on sales and operating profits from 2011 to 2015, the shipbuilder said.

The assessment reportedly added that DMSE will likely be the weakest shipbuilder to survive among the three, as it does not have a parent group and has a financial system vulnerable to risk.

The shipbuilder objected to the preliminary assessment, claiming that it could not accept the report as it “ignored the potentials of the world’s top shipbuilding industry of Korea.”

“Mckinsey’s report presumed that the past five-year performance will repeat in the next five years and that the business will continuously be scaled down amid the worsening market conditions. The report, which is based on unreasonable assumptions, did not ever count the company’s self-rescue efforts or the business strategy to cut the marine plant business,” the company said.

Meanwhile, the government reiterated that there will be no further financial injection into DSME, despite the company’s urgent circumstances.

“It‘s true that the situation of DSME has worsened as the new orders are much lower than expected. The great principle of giving no further liquidity support, however, has not changed,” said Deputy Prime Minister and Finance Minister Yoo Il-ho during a parliamentary audit held at the National Assembly on Wednesday.

In October last year, the government decided to pour 4.2 trillion won into the ailing shipbuilder through two creditors -- the Korea Development Bank and Export-Import Bank of Korea -- to alleviate the liquidity crisis, with 3.2 trillion won injected so far. The rest will be provided in the remaining year.

When asked last month whether the government had decided to provide the massive support while being aware of the company’s accounting fraud of 5 trillion won, Yoo had said he thought such financial aid was necessary despite the risk.

Amid escalating concerns over the shipbuilder’s financial health and the sharp drop in new orders, there had been speculations that the government might potentially provide additional help.

Exim Bank of Korea Chairman and President Lee Duk-hoon also stressed the need for additional public support for DSME at a parliamentary audit held Tuesday.

By Lee Hyun-jeong /The Korea Herald (rene@heraldcorp.com)