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15 Korean shipbuilders to face debt reworking programs

15 Korean shipbuilders to face debt reworking programs

Seoul: Creditor banks announced yesterday they are to cease financial support for four builders and one shipyard and will put another 15 firms under debt rescheduling programs, writes the Korea Herald.

The decision is based on the lenders' credit evaluation of 74 small- and medium-sized construction firms and shipbuilders, the Financial Supervisory Service said.

The five that were rated as nonviable are Down Technology Group, Saerom Sungwon Industrial, Dongsan Construction, Kisan Construction and YS Heavy Industries. YS applied for court receivership during the evaluation.

The 13 construction companies and two shipyards in line for creditor-led debt rescheduling are: Shindo Engineering & Construction, Taewang Construction, SC Hanbo E&C, Songchon E&C, Hankuk Construction, Hwasung Development, Youngdong Construction, Neul Pooleun Oscarville, Daewon Industrial Construction, Le Meilleur, Daea Construction, Jungdo, Saehan Construction, Seko Heavy Industries and TKS.

The number of companies subject to the second-round of restructuring has increased by four from the first round in January, which found two companies nonviable and put 14 others under debt rescheduling programs.

"The increase is due mainly to the deterioration of fourth-quarter sales, on which the evaluation was based," an FSS official told reporters. "Creditor banks have tried to be as objective as possible, bearing in mind criticism they were generous with the first round of evaluations," he said.

Among the 14 companies selected in the previous evaluation, two, Dongmoon Construction and Isu Construction, are currently under bank-led workout programs, while others are still undergoing creditors' examinations of their financial conditions.

"The examination of three shipbuilders that were chosen for restructuring in the first round - Daehan, Jinse and Nokbong - will not end until April because it takes a while to resolve problems related to production orders of the companies. Examination of the other companies will be finalized by the end of this month," said the FSS official.

About the imminent restructuring of maritime logistics industry, he said banks are working out guidelines to evaluate companies. "The evaluation process will begin in April," the official said.  [27/03/09]