Doosan Submits Self-Rescue Plan to Creditors... "Reviewing All Assets for Possible Sale and Securitization" (Comprehensive)

On the 27th, the Doosan Tower building in Dongdaemun-gu, Seoul, is visible as the government decided to inject 1.6 trillion won into Doosan Heavy Industries, which is experiencing financial difficulties, through the Korea Development Bank and the Export-Import Bank of Korea. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Ki-min Lee] Doosan Group, which is receiving 1 trillion KRW in support from the state-run Korea Development Bank and Export-Import Bank of Korea, has submitted a self-rescue plan.

On the 13th, Doosan announced that it had delivered a financial structure improvement plan for Doosan Heavy Industries & Construction to the creditors. Doosan Group stated, “The group and major shareholders have prepared the financial structure improvement plan with a resolute attitude to fulfill responsible management,” and explained, “Doosan Heavy Industries & Construction is also reviewing all assets that can be sold or securitized to normalize management and swiftly improve the financial structure.”

They added, “We will focus all our capabilities on normalizing the management of Doosan Heavy Industries & Construction through faithful implementation of this plan.”

Doosan also explained, “The financial structure improvement plan submitted to the creditors today will be finalized after consultations with the creditors and board resolutions,” and “All affiliates and employees will do their best to faithfully implement the finalized plan to achieve the goals as early as possible.” Doosan Group added that detailed information will be announced after the financial structure improvement plan is finalized.

Therefore, once the self-rescue plan is finalized, specific asset sales and securitization measures are expected to be pursued. The creditors had announced on the 27th of last month that they would review additional funding support after confirming self-rescue efforts following their decision to provide 1 trillion KRW in support to Doosan Heavy Industries & Construction.

Accordingly, it is expected that Doosan has presented a high-intensity reform plan that changes the overall group’s governance structure. First, the financial and business sectors believe that the self-rescue plan includes the sale of Doosan Solus and Doosan Fuel Cell shares, as well as the sale of some business units of Doosan Heavy Industries & Construction. Doosan Solus, a battery foil and OLED affiliate, is a company spun off from Doosan Corporation, with Doosan Corporation and Chairman Park’s related parties holding 50.48% of common shares and 11.04% of preferred shares.

Doosan Fuel Cell is also considered a key affiliate of Doosan, achieving annual orders of 1.2 trillion KRW this year and surpassing 1 trillion KRW for two consecutive years. Fuel Cell’s shares are held by Doosan (18.05% common shares, 12.47% preferred shares) and related parties with 65.08% common shares and 48.34% preferred shares.

Furthermore, it is observed that the plan includes measures to sever the vertical affiliate structure linking Doosan Heavy Industries & Construction’s subsidiaries Doosan Infracore and Bobcat. The creditors reportedly ordered the breaking of the vertical affiliate structure from Doosan Corporation → Doosan Heavy Industries & Construction → Infracore → Bobcat. This means preventing the financial strain caused by Infracore and Bobcat’s performance flowing directly to Doosan Heavy Industries & Construction due to its management difficulties.

In the industry, a method is being discussed where Doosan Heavy Industries & Construction is split into an operating company and an investment company, with the shares of Infracore and Bobcat held by the investment company, which is then merged into Doosan Corporation. This method was used when Doosan Heavy Industries & Construction sold Doosan Engine in the past. In addition, Doosan Heavy Industries & Construction is considering additional voluntary retirements and some temporary shutdowns.

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