Samsung Heavy Industries to join self-restructuring

Samsung Heavy Industries, Korea’s third-largest shipbuilder, is set to join government-led efforts to launch large-scale self-restructuring in the troubled shipbuilding industry, according to its creditors on Tuesday.

Korea Development Bank demanded on April 29 that the shipbuilding arm of Samsung Group submit measures to put its management back on track to normalcy, including with regard to cost cutting.

The request from the public bank comes after a meeting, hosted by the Financial Services Commission, of government officials from different related departments who urged the three top Korean shipbuilders to devise their own recovery measures.

Their creditors will monitor how those companies carry out the plans proposed.

Hyundai Heavy Industries, the No. 1 player in the sector, was the first among the three to be asked to do so by its main creditor, Hana Bank, on April 28. The company immediately followed up with a plan to fire 25 percent of the executives from its shipbuilding affiliates.