Doosan Submits Final Self-Rescue Plan Including 'Non-Core Asset Sales and Responsible Management' to Creditors

Dosan Heavy Industries' Capital Increase and Doosan Co., Ltd.'s Participation in Capital Increase
Major Shareholders Implement Responsible Management by Not Receiving Dividends or Bonuses and Significantly Returning Salaries
Dosan Heavy Industries Restructures Business Focusing on Future Innovative Technologies Such as Gas Turbines and Renewable Energy

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Doosan Group has submitted a final self-rescue plan to creditors that includes the sale of non-core assets of Doosan Heavy Industries & Construction and responsible management by the controlling family.

Doosan announced on the 27th that it finalized the self-rescue plan after discussions with the creditors and submitted it to them. Doosan has been working on adjusting the self-rescue plan submitted on the 13th of this month with the creditors.

Doosan explained that it plans to secure more than 3 trillion KRW through asset sales and cost reduction efforts, strictly improve the financial structure of Doosan Heavy Industries & Construction, and promote early normalization of management. The parent company, Doosan Corporation, will fully support Doosan Heavy Industries & Construction's self-rescue efforts and will pursue asset sales and participation in capital increase of Doosan Heavy Industries & Construction to this end.

Park Jung-won, chairman of Doosan Group, along with major shareholders of Doosan Group, will make investments in Doosan Heavy Industries & Construction with their personal funds as part of responsible management. They have decided not to receive dividends or bonuses and to significantly return their salaries. The major shareholders of Doosan Group had previously provided their shares as collateral to the creditors when requesting emergency operating funds at the end of March this year. Doosan Group stated, “Specific details regarding capital increase and asset sales will be decided through procedures such as board meetings in the future.”

A Doosan official said, “Even if the global economy and power generation market recovery are delayed, we will make self-rescue efforts to improve the financial structure by more than 3 trillion KRW so that Doosan Heavy Industries & Construction can achieve the highest level of financial soundness,” adding, “To this end, each company will proceed with paid-in capital increase and asset sales through necessary procedures such as board meetings.”

Doosan also emphasized, “We will normalize Doosan Heavy Industries & Construction early to promptly repay the creditor support funds, and major shareholders and all employees will make their best efforts to fulfill the company's original role of contributing to the national economy through promoting exports and domestic demand.”

At the center of management difficulties, Doosan Heavy Industries & Construction plans to make high-intensity efforts to promote paid-in capital increase and reduce various costs, and proceed with the sale of non-core assets. Doosan Heavy Industries & Construction also intends to improve its financial structure and reorganize its business structure. The company has decided to focus its capabilities on future innovative technology businesses and has set two major pillars for business restructuring: the gas turbine power generation business and the renewable energy business.

Doosan Heavy Industries & Construction's Korean-type gas turbine, independently developed as the world's fifth last year, is currently undergoing performance testing. The plan is to commercialize it after demonstration and launch it in the global market. The global gas turbine power generation market was worth 97 trillion KRW as of 2018 and is expected to grow to twice that size by 2035.

In addition to gas turbine sales, Doosan Heavy Industries & Construction is hopeful about stable sales due to high demand for parts replacement and maintenance. Therefore, a new business based on special metal material 3D printing technology obtained during the independent development of the gas turbine will also be pursued. A Doosan Heavy Industries & Construction official said, “We will expand our business areas to new fields such as aircraft parts and high value-added products needed for the defense industry by utilizing special metal material 3D printing technology.”

Furthermore, Doosan Heavy Industries & Construction plans to expand existing businesses such as wind power and energy storage systems (ESS), promote eco-friendly hydropower projects and solar EPC projects, and enter the hydrogen industry including hydrogen production and liquefaction.

A Doosan Heavy Industries & Construction official said, “We will strengthen our position as a ‘Power Solution Provider’ centered on these two eco-friendly future high value-added businesses.”

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