Doosan Heavy Industries & Construction to Receive Additional Support of 800 Billion KRW from KEXIM and KDB Bank

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Doosan Heavy Industries & Construction, which is experiencing financial difficulties, will receive additional funding from the Korea Development Bank and the Export-Import Bank of Korea.

According to banking and industry sources on the 27th, Doosan Heavy Industries & Construction is expected to receive an additional 800 billion KRW in funding from the Korea Development Bank and the Export-Import Bank as early as this afternoon. It is reported that the policy banks, including the Korea Development Bank and the Export-Import Bank, decided on the additional support after reviewing the financial restructuring plan (self-rescue plan) submitted by Doosan Heavy Industries & Construction on the 13th.

At the end of last month, Doosan Heavy Industries & Construction received an emergency support of 1.6 trillion KRW from the policy banks. One trillion KRW was in the form of an overdraft loan limit, and 600 billion KRW was funding to repay foreign currency bonds (500 million USD) maturing on that day. Despite the support from the policy banks, Doosan Heavy Industries & Construction is still facing liquidity difficulties. It is known that part of the funds received from the policy banks will be used for early repayment of 400 billion KRW in bonds with warrants (BW) and restructuring costs in early next month.

However, the borrowings of Doosan Heavy Industries & Construction maturing this year amount to about 4.2 trillion KRW. This consists of 1.25 trillion KRW in corporate bonds, 1.1 trillion KRW in policy bank loans, 780 billion KRW from commercial banks, 360 billion KRW from foreign banks, and 700 billion KRW in commercial paper (CP) and electronic short-term bonds.

Doosan Heavy Industries & Construction has yet to pay statutory retirement benefits to about 650 voluntary retirees. Although the documents state that payment should be made by the 29th of this month, it was initially announced that payment would be made on the regular payday of the 25th. A Doosan Heavy Industries & Construction official said, "Payment will be made by the 29th of this month." Voluntary retirees are to receive up to 24 months’ salary depending on their years of service and a consolation payment of 50 million KRW for those with over 20 years of service.

Doosan Heavy Industries & Construction is also preparing for a second round of voluntary retirement and temporary suspension of idle personnel. However, this is expected to face opposition from the labor union. On the 28th, Doosan Heavy Industries & Construction will begin wage and collective bargaining negotiations starting with a meeting between labor and management at its Changwon headquarters. Although Doosan Heavy Industries & Construction’s wage and collective bargaining agreements have been settled without disputes for the past decade, significant difficulties are anticipated this time.

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