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South Korea to inject $2.6 billion into ailing shipyard Daewoo

The decision to provide another capital injection to Daewoo comes as its debt begins to mature in April


March 23, 2017
The Canadian Press
The Canadian Press

Image: courtesy of Daewoo Shipbuilding & Marine Engineering Co.

SEOUL, Korea—South Korea will inject 2.9 trillion won ($2.6 billion) into Daewoo Shipbuilding & Marine Engineering Co. to keep the world’s second-largest shipbuilder from going bankrupt.

Financial Supervisory Commission said March 23 that the decision to provide another capital injection to Daewoo comes as its debt begins to mature next month.

The government estimates the cost of letting the shipbuilder fail would be too much for the country’s economy. State-owned Korea Development Bank took over Daewoo in 2000.

It received 4.2 trillion won from the government in 2015 and another 2.8 trillion won in November to shore up its capital.

Despite heavy job cuts and other restructuring efforts, the company reported an annual net loss of 2.7 trillion won in 2016.

News from © Canadian Press Enterprises Inc. 2016