Export-Import Bank Converts Doosan Heavy Industries $500 Million Foreign Currency Bonds into Loans (Update)

1-Year Maturity 586.8 Billion KRW Loan for Foreign Currency Public Bond Repayment Funding

[Asia Economy Reporter Kangwook Cho] The Export-Import Bank of Korea (KEXIM) has decided to convert Doosan Heavy Industries & Construction's $500 million foreign currency bonds into loans.

On the 21st, KEXIM held an expanded credit committee meeting chaired by President Visit Kyoo and announced that it had approved a financial support plan for Doosan Heavy Industries & Construction.

According to the support plan, KEXIM will provide a loan of 586.8 billion KRW to support the repayment of Doosan Heavy Industries & Construction's foreign currency bonds. The loan will be in Korean won with a one-year term. Previously, Doosan Heavy Industries & Construction requested KEXIM, which guaranteed the payment of the $500 million foreign currency bonds maturing on the 27th, to convert these bonds into loans.

A KEXIM official explained, "This support is not premised on additional assistance but is of the nature of maturity extension," adding, "It aligns with the purpose of the 'Financial Support Agreement for Overcoming the COVID-19 Crisis' signed on the 23rd of last month to maintain liquidity support effects for companies experiencing financial difficulties."

The decision to denominate the loan in Korean won was made at the request of Doosan Heavy Industries & Construction. Doosan Heavy Industries & Construction has already entered into forward exchange (F/X) contracts with six domestic commercial banks and other financial institutions to pay in Korean won and receive foreign currency (dollars) for the maturity repayment of foreign currency public bonds. According to the forward exchange contract terms, Doosan plans to convert the foreign currency at a favorable exchange rate in the 1,170 KRW range compared to the current rate.

KEXIM stated that any additional support will be decided after a comprehensive review of the feasibility and executability of Doosan Group's financial restructuring plan for normalizing Doosan Heavy Industries & Construction's management, compliance with restructuring principles, the burden of financial support and repayment possibility for creditors, and the impact on national key industries, followed by consultations with Doosan Group.

Currently, KEXIM is conducting due diligence on the entire Doosan Group together with the Korea Development Bank. A KEXIM official said, "We are conducting comprehensive due diligence on financial and operational aspects through professional consulting firms," adding, "Considering the time required for accurate and detailed verification, the final plan is expected to be confirmed within the first half of the year."

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