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Korea's big three yards look at selling debt

Korea's big three yards look at selling debt

Seoul: Hyundai Heavy Industries Co. and two other South Korean shipyards may borrow about 3 trillion won ($2 billion), tapping the debt market for the first time in seven years to replenish capital as orders dry up, analysts told Bloomberg.
Hyundai Heavy, the world's biggest shipyard, Samsung Heavy Industries Co., and Daewoo Shipbuilding & Marine Engineering Co., which together meet more than a fifth of the global orders, may sell debt as early as this month, said analysts, including Cho In Karp at Good Morning Shinhan Securities Co. in Seoul.
Daewoo will seek investor responses next week to determine the size and time of a corporate bond sale, spokesman Ahn Wook Hyeon said in an interview today, without giving more details.?"There's interest for debt sold by companies that have high credit ratings and little risk of default," said Park Se Girl, a fund manager who oversees the equivalent of $1.4 billion in securities at Meritz Asset Management Co. in Seoul. ?
Shipyards in South Korea, the world's largest shipbuilding nation, have had orders slashed since September as dwindling global trade slashed cargo rates and demand for new vessels. Cash and cash equivalent at Hyundai Heavy dropped 41 percent to 2.34 trillion won at the end of December from the previous quarter. ?
"The cash levels have dropped since the fourth quarter because while they haven't received any fresh cash from new orders, they have spent money on expansion and material purchases to meet existing orders," Cho said. "They are also trying to maintain a certain level of cash." [13/03/09]?

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