Daewoo falls over concerns that liabilities outweigh assets
Daewoo Shipbuilding & Marine Engineering fell to the lowest price in almost 13 years in Seoul trading on concern that its liabilities outpace assets.
Shares of the world’s second-largest shipbuilder dropped 7.26 percent to 6,000 won, the lowest intraday level since November 2002. The stock earlier declined as much as 7.9 percent and is among the 10 worst performing stocks among the 1,002 members of the MSCI Asia Pacific Index on Wednesday.
“There are concerns about the financial health of Daewoo Shipbuilding,” Lee Jae-won, an analyst at Yuanta Securities Korea, said. “The company’s financials should improve as it’s planning to sell non-core assets to raise funds.”
Daewoo Shipbuilding has more current liabilities than assets, its auditor Deloitte Anjin LLC said in the company’s first-half financial statement released Aug. 17.
The shipbuilder is carrying out a restructuring plan and is in talks with creditors for new funding to ease concerns with its financial standing, the auditor said.
The shipbuilder’s executives resigned and it plans to sell non-core subsidiaries and assets, after a second-quarter loss of 2.4 trillion won caused by delays in offshore rig-building orders. Its creditor and biggest shareholder, Korea Development Bank, is re-evaluating the shipbuilder. Bloomberg