Doosan Heavy ends debt restructuring with a new name
Doosan Heavy Industries & Construction ended a 23-month debt restructuring program, and announced turnaround plans.
Korea Development Bank (KDB), the company's main creditor, announced Monday that Doosan Heavy was ready to move forward.
“Considering Doosan Heavy Industries & Construction's improving liquidity and financial prospects evaluated by external analysts, the company is in a state in which it can be independently managed by itself,” read a KDB statement. “Through a successful restructuring program, Doosan Heavy not only overcame its liquidity crisis but also built a new business structure fit for the future.”
Welcoming the news, investors pushed shares of Doosan Heavy up 10.05 percent to 20,800 won on Tuesday.
The announcement came 23 months after Doosan Group asked KDB and Export-Import Bank of Korea (Eximbank) to bail the company out.
After President Moon Jae-in announced a phasing out of nuclear power, Doosan Heavy -– a company heavily focused on the nuclear power plant business — lost significant revenue and became cash-strapped. The company owns Doosan Engineering & Construction, which has been posting huge losses in recent years.
A 3.6-trillion-won emergency loan was given Doosan Heavy by KDB and Eximbank from March through June 2020.
Doosan Group has been improving its cash flow, selling 3.1 trillion worth of assets including Doosan Group’s headquarters building Doosan Tower for 800 billion won, a 52.93 percent stake in Doosan Solus Advanced Materials for 698.6 billion won and 34.97 percent of Doosan Infracore for 850 billion won. New Doosan Heavy stock worth 1.15 trillion won was issued in February.
Challenges remain. With nuclear energy less attractive, it has been expanding into the hydrogen energy business.
Last October, it signed a memorandum of understanding with Korea Southern Power Corp. to commercialize hydrogen turbines and is currently building a hydrogen liquefaction plant in Changwon, South Gyeongsang.
Doosan Heavy is also planning to change its name.
According to JoongAng Ilbo reports, Doosan Heavy applied for a trademark and website domain for Doosan Enerbility in January.
The new name is a combination of the words “energy” and “ability,” and will be officially announced at an annual shareholders meeting in March.
If the change is finalized, it will be the first time in 22 years the company has changed its name. It started as Hyundai International in 1962, owned by Halla Group. It was renamed Korea Heavy Industries & Construction in 1980 and Doosan Heavy in 2000.
BY CHUN IN-SUNG, LEE JI-YOUNG [firstname.lastname@example.org]