DSME’s liquidations include luxury chopper

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DSME’s liquidations include luxury chopper

It’s looking like troubled Daewoo Shipbuilding & Marine Engineering (DSME) won’t meet its sales goals this year, and in a desperate effort to raise cash and normalize its finances, the shipbuilder has begun liquidating its assets - including a helicopter used to carry its top executives and VIPs.

According to industry data on Wednesday, DSME has won 31 contracts to build vessels including 11 container ships and nine LNG carriers this year worth about $4.5 billion. But that figure is only 34.6 percent of its $13 billion goal the company set earlier this year. DSME has won more than $10 billion in contracts for the last five consecutive years, but this year’s numbers are the lowest since 2009, when most manufacturing businesses suffered from the 2008 financial crisis.

The company isn’t expected to win any additional contracts for the year.

After initially reporting about 450 billion won ($390 million) in losses last year, the company said an additional 4.5 trillion won in losses were made through the third quarter this year, mainly due to struggles in its risk-laden offshore plant businesses.

As part of its restructuring, the shipbuilder has been trying to sell off unnecessary assets to provide more cash, and the latest casualty was a 14-seat Sikorsky helicopter sold on Monday.

DSME hasn’t revealed how much the helicopter was sold for, but sources said around 2.5 billion won.

The move leaves the company with no more helicopters. The shipbuilder’s only other was sold in July 2013 after access between Busan and the company’s sites in Changwon, South Gyeongsang, became much easier due to the opening of the Geoga Bridge in 2010.

From now on, VIPs and executives will be transported by bus, the company said.

“We are doing this because we want to be back on track as soon as possible,” a spokesman said.

The company had previously sold affiliate FLC, as well as a building in Sinmunro, central Seoul. DSME is also trying to sell the building that houses the company’s headquarters in Euljiro, central Seoul, as well as its office building in Dangsan-dong, western Seoul.

On Monday, the company released a statement pledging that its management and labor unions agreed to do their best to normalize the company, which included adjusting the wage system for workers and improving risk management systems.

“The current crisis is our first time going through such hardships,” CEO Jung Sung-leep said. “We should stick together and try to communicate with each other more to overcome the crisis.”

The situation isn’t so different for Hyundai Heavy Industries (HHI) and Samsung Heavy Industries, which are Korea’s top shipbuilders alongside DSME. This year’s sales goal for HHI was $19.1 billion, but the company only won about $11.6 billion in contracts, about 61 percent of the goal. The goal for Samsung was to win $15 billion worth of contracts, but it only recorded $10 billion, or 67 percent.

BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]

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