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Three Korean yards slated for debt workout

Three Korean yards slated for debt workout

Seoul: Daehan Shipbuilding, Jinse Shipbuilding and Nok Bong Shipbuilding are all being urged to apply for rehabilitation proceedings (workout) under the control of banks. A group of banks have scrutinized the books of these three and concluded they can survive given some help unlike C&Heavy Industries which was cast asunder earlier this week by the Korean Federation of Banks.
Beginning this month, South Korean financial organizations conducted credit checks on more than 100 shipyards and construction companies mired in deteriorating business performance.
Daehan had been faced with a string of problems, including management instability at its parent company Daeju Group. Though it asked owners to change their payment schemes and so on, it decided at the turn of last year to abort the construction of its No.2 dock in light of its worsening financial problems. As for Jinse, its issuance of refund guarantees had stalled, reportedly causing the cancellation of the orders for around 20 bulkers in the autumn of last year.
Meanwhile, Nok Bong has a more than 20-year track record in shipbuilding. Although it managed to ride past the IMF crisis in the late 1990s, it seems that things have now turned for the worse. [22/01/09]

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