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Korea Eximbank, SHI to help debt-ridden Sungdong

Korea Eximbank, SHI to help debt-ridden Sungdong
The Export-Import Bank of Korea (Korea Eximbank) and Samsung Heavy Industries (SHI) have agreed to help debt-ridden Sungdong Shipbuilding & Marine Engineering overcome its financial instability, reports said.

Korea Eximbank is the main creditor of Sungdong with loans worth KRW1.1trn ($932.6m) and refund guarantees worth KRW900bn.

“Samsung Heavy will be in charge of Sungdong’s sales, procurement, production and technology sectors while we will manage its human resources, labour issues and financial matters,” Lee Duk-hoon, chairman of Korea Eximbank, was quoted by Korea Times.

SHI, in return, will be given priority when Sungdong is put on sale after it completed its restructuring program, if SHI is interested to buy the company, according to Lee.

The latest agreement will be effective for four years with an option of three additional years.

Lee said the bank will offer more loans worth a few hundred billion won to Sungdong by the end of this year.

“Sungdong is a key company in Tongyeong’s regional economy, affecting employment for tens of thousands of people. We will do our best to keep it afloat by minimizing the economic shock,” Lee was reported saying.