Doosan Heavy Industries Provides 200 Billion KRW Emergency Funding to Indian Subsidiary

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 Seungjin Lee] Doosan Heavy Industries & Construction has provided emergency operating funds worth 200 billion KRW to its Indian subsidiary facing financial difficulties.

On the 2nd, Doosan Heavy Industries & Construction announced that it supported 200 billion KRW by participating in a paid-in capital increase for 'Doosan Power Systems India Private (DPSI),' which operates in power EPC, equipment, and services.

DPSI is undertaking six thermal power plant construction projects in India with a total order amount of approximately 4 trillion KRW. Recently, it has experienced financial difficulties due to the impact of the novel coronavirus disease (COVID-19).

A Doosan Heavy Industries & Construction official explained, "Due to delays in projects and rising raw material prices caused by COVID-19, combined with tightening financial markets, financial support became necessary. There was a request from the Indian state government, the client, and the amount is recoverable."

According to Doosan Heavy Industries & Construction, DPSI currently has retention money amounting to 300 billion KRW that has not been received from the client. Additional construction costs due to rising raw material prices have also been claimed. However, since the Indian clients are in poor financial condition, there is a possibility that recovery may not be swift.

On the same day, Doosan Group announced that it provided additional collateral to the Korea Development Bank and the Export-Import Bank of Korea.

As compensation for the support provided by creditors to Doosan Heavy Industries & Construction, Doosan Group offered 113,559,768 shares of Doosan Heavy Industries & Construction common stock and trust beneficiary rights of Doosan Tower as collateral. Additionally, 1,411,004 shares of Doosan Qubex common stock and land of the Chuncheon training center were also provided.

Doosan Group stated that the collateral amount provided for Doosan Heavy Industries & Construction's borrowings of 3 trillion KRW is 1.096 trillion KRW. Since providing collateral on March 26, the amount increased by 392.6 billion KRW due to stock price rises, and the additional collateral amount is 38.8 billion KRW.

The collateral amount excludes senior collateral amounts from the total amount combining stocks and real estate. The collateral provision period lasts until full repayment of the debt.

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