Doosan Chairman Park Jung-won: "I will repay over 1 trillion won within the year... Fulfilling major shareholder responsibility"

[Asia Economy Reporter Ki-min Lee] Doosan Heavy Industries & Construction will carry out a paid-in capital increase and capital expansion worth approximately 1 trillion KRW within this year. Major shareholders of Doosan Group, including Chairman Park Jung-won, are also expected to participate. This is the first time Chairman Park has directly expressed his commitment as a major shareholder since Doosan Heavy Industries received emergency funding from creditors such as the Korea Development Bank and the Export-Import Bank of Korea.

In a message titled "To All Group Executives and Employees" sent to all group employees on the morning of the same day, Chairman Park stated, "I feel a heavy responsibility as chairman seeing all of you worried about the company due to the liquidity issues faced by Heavy Industries and the overall poor management of the company."

Chairman Park explained, "Doosan Heavy Industries faces the challenge of restructuring its business and drastically improving its financial structure to establish a sustainable management system," adding, "We will proceed with asset sales in line with this direction." He emphasized, "Doosan Corporation and its major shareholders will also participate in the capital increase and capital expansion of Heavy Industries to faithfully fulfill their responsibilities as major shareholders." He also revealed, "Doosan Corporation is currently pursuing the sale of Doosan Tower, some of its holdings, and business units to improve its own financial structure and participate in Doosan Heavy Industries' capital expansion."

Regarding the deterioration in management, Chairman Park admitted, "The group’s management has done its best to respond to market trend changes and improve financial soundness by promoting business restructuring, but ultimately, the business restructuring and affiliate normalization fell short of goals, worsening the financial condition." He added, "Meanwhile, as the capital market contracted, Heavy Industries faced a crisis situation. Regardless of the reasons, we take the social repercussions and responsibilities arising from this very seriously."

Previously, Doosan Group announced that it had received emergency support of approximately 3.6 trillion KRW from creditors including KDB Industrial Bank and the Export-Import Bank of Korea to resolve Doosan Heavy Industries' management crisis, and planned to secure liquidity worth 3 trillion KRW as a self-help measure for management normalization. At that time, Doosan Group explained that it would proceed with asset sales, paid-in capital increases, and cost reductions to secure liquidity. Recently, Doosan Group also revealed plans to transform its business structure into an eco-friendly energy specialist company centered on gas turbine and wind power businesses as part of Doosan Heavy Industries' normalization plan. Chairman Park expressed his thoughts on this, saying, "Fortunately, thanks to the government's interest in national key industries and support from creditors, the foundation to resolve Heavy Industries' liquidity issues has been established," and added, "I believe we have incurred social debt beyond just financial debt."

Chairman Park also expressed gratitude to employees suffering from the management downturn. He said, "I thank all executives and employees who are quietly holding their positions despite the difficult situation, and especially express special gratitude for the sacrifices of those participating in sharing the pain." Earlier, Doosan Heavy Industries conducted two rounds of voluntary retirement for about 850 employees this year to reduce fixed costs, and since last month, about 350 idle workers have been on leave. Additionally, executives of all Doosan Group affiliates have been returning more than 30% of their salaries since April, and Doosan Heavy Industries executives have returned up to 50%.

[Image source=Yonhap News]

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