Doosan Heavy to issue additional shares as debts pile up

Doosan Group Chairman Park Jeong-won. [YONHAP]

Doosan Group Chairman Park Jeong-won on Thursday said that debt-laden Doosan Heavy Industries & Construction will raise a trillion won ($835.8 million) this year by issuing new shares and selling off assets.

Park said in a statement sent to Doosan employees that Doosan Heavy plans to issue more shares with the goal of improving its financial situation.

“For Doosan Heavy Industries & Construction to prepare for a sustainable management system, the business structure needs to be reformed and the financial structure improved,” wrote Park in the statement. Selling assets, including Doosan Tower in central Seoul, is also part of the plan.

“Doosan Corporation is in the process of selling Doosan Tower, the shares it owns and the businesses,” said Park.

Doosan Tower, or Doota, which served as the group’s headquarters, is being sold. The building, a landmark structure in the Dongdaemun neighborhood in central Seoul, is expected to sell for 700 to 800 billion won.

Doosan Heavy, the leader of power equipment maker, received a bailout from state-run banks for a third time on June 1, receiving 1.2 trillion won to help it normalize operations.

“Preparing for sustainable management for the heavy industries company is following in the footsteps of the global energy trend,” Park said. “[Doosan] will spur the horse taking the difficult time as an opportunity while maintaining the portfolio revision that centers on the gas turbine development business and new renewable energy.”

Doosan Group said earlier that Doosan Heavy will speed up the process of reforming its business portfolio to focus on renewable energy and gas turbine development, while expanding businesses related with energy, energy storage systems and hydrogen production.

On Wednesday, local media that reported Doosan Corporation is reassigning some of its employees to its subsidiaries. The group implied that it has been reducing the role of the holding company, and confirmed that the latest decision to move its employees to subsidiaries is part of that plan.

The company didn’t specify the exact number of employees moving to Doosan affiliates, but said there are many cases when employees working for the holding company had originally worked for another affiliate.

“They’re just returning to where they originally belonged,” said Doosan.

BY JIN MIN-JI [jin.minji@joongang.co.kr]