Government Decides on Emergency Loan of 1 Trillion Won to Doosan Heavy Industries

[Asia Economy Reporter Moon Chaeseok] The government has decided to provide a loan of 1 trillion won to Doosan Heavy Industries, which is experiencing management difficulties, through the Korea Development Bank and the Export-Import Bank of Korea.

According to the government on the 27th, from 7:30 a.m. to 8:30 a.m. on the same day, the 'Ministerial Meeting on Strengthening Industrial Competitiveness (Sangyeongjang)' was held at the Government Seoul Office to discuss financial support measures for Doosan Heavy Industries. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, Minister of Trade, Industry and Energy Sung Yun-mo, and Financial Services Commission Chairman Eun Sung-soo attended.

At the Sangyeongjang meeting, two agenda items were addressed: ▲checking the status of major industries such as manufacturing ▲financial support for Doosan Heavy Industries. The government confirmed that it will lend 1 trillion won to Doosan Heavy Industries, which is working to improve its financial structure due to worsening management. In this regard, the Korea Development Bank plans to hold a briefing session on the 1 trillion won loan in the afternoon.

If the loan is finalized, Doosan, the major shareholder of Doosan Heavy Industries, is expected to provide its holdings of Doosan Heavy Industries’ stocks and real estate as collateral for the loan agreement. A Doosan Heavy Industries official said, "We are not aware of any collateral-related matters mentioned additionally at the Sangyeongjang meeting beyond the disclosed information."

An official from the Ministry of Trade, Industry and Energy stated, "The parties directly deciding on financial support at the Sangyeongjang meeting are the financial sector, Korea Development Bank, Export-Import Bank, and other creditors," adding, "From the ministry’s perspective, we mentioned Doosan Heavy Industries’ position in the industry regarding energy security and renewable energy, as well as the necessity of financial support."

He said, "Considering the economic difficulties caused by the novel coronavirus disease (COVID-19), the discussion at the Sangyeongjang meeting was meaningful as the government’s first financial support related to the liquidity of individual companies."

Meanwhile, support plans for major airline companies such as Korean Air were not discussed at the meeting. Korean Air faces a corporate bond maturity of 240 billion won next month and is experiencing difficulties as domestic credit rating agencies have placed its corporate bond rating (BBB+) under review for a downgrade.

This content was produced with the assistance of AI translation services.