KDB head says DSME will healLee Dong-geol, the new chairman of state-run financier KDB Financial Group, pledged on Thursday to turn Daewoo Shipbuilding & Marine Engineering (DSME) into an example of successful corporate restructuring.
At his first press conference since taking office last week, the financial veteran with a 40-year-long career in the industry showed confidence in running the country’s largest public financial institution and a major creditor for many large corporations.
“DSME is considered to be highly competitive in the LNG carrier and defense industries,” Lee said. “I would advise the shipbuilder to reduce its reliance on offshore plants and expand the defense business, which is why I believe it is possible to normalize the shipbuilder and make it a successful case of restructuring.”
The shipbuilder is competitive enough to correct itself, he said, adding that it doesn’t need additional financial help from the creditor.
In last October, KDB, the largest creditor of the nation’s No.3 shipbuilder said it will provide 4.2 trillion won ($3.4 billion) to DSME, predicting that it would make a total of 6.2 trillion won in losses in 2015.
Lee highlighted that the basic principle of corporate restructuring is a focus on a company’s capability to recover on its own and normalize operations without outside help.
“Restructuring should be constant and preemptive,” Lee added. “There must be a deadline for restructuring so we don’t waste time.”
With passage of a bill extending the Corporate Restructuring Promotion Act on Thursday at the National Assembly, which requires all financial creditors help restructuring of indebted companies, it is expected that KDB will be able to proceed with the scheduled restructuring procedures for the country’s struggling shipbuilders and shippers.
As for Hyundai Merchant Marine, the chairman pointed out its stakeholders need to make a bold decision about voluntary debt adjustment.
Earlier this month, Hyundai Group said it will sell more than 22 percent of Hyundai Securities as part of efforts to accumulate cash to help out the struggling shipping affiliate.
“Selling Hyundai Securities can be a solution, but it will be difficult [to expect successful restructuring] unless the stakeholders agree to go through the workout program,” Lee said.
BY SONG SU-HYUN [firstname.lastname@example.org]
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