'Restructuring Model Student' Doosan Left with 500 Billion Won Debt... Expected to Graduate from Creditors' Management Within the Year

3 Trillion Won Borrowings with 1.6 Trillion Repaid by End of Q2
Borrowings Reduced to Around 500 Billion Won Considering InfraCore Sale Proceeds
Core Affiliate Sales and Capital Increase Executed
Early Graduation Expected in One and a Half Years Through Accelerated Restructuring

[Asia Economy Reporter Su-yeon Woo] Doosan Group, known as the "model student of corporate restructuring" in the business world, is about to complete its harsh restructuring and is on the verge of early graduation from creditor management within this year. Once the transfer of Doosan Infracore shares is finalized this week, the outstanding borrowings are expected to decrease to the 500 billion KRW range, marking a successful conclusion to the financial structure improvement efforts.

According to Doosan Heavy Industries & Construction's semi-annual report on the 18th, as of the end of the second quarter this year, the outstanding borrowings Doosan Group has from creditors such as the Korea Development Bank and the Export-Import Bank of Korea amounted to 1.3969 trillion KRW. This means that about 1.6 trillion KRW of the total 3 trillion KRW borrowings were fully repaid within one year.

Considering the 850 billion KRW payment from the sale of Doosan Infracore expected on the 19th of this month, the outstanding borrowings will decrease to the mid-500 billion KRW range. Doosan Heavy Industries plans to prioritize using the proceeds from the Infracore sale to repay the creditors' emergency operating funds, which is expected to reduce interest expenses by about 10 billion KRW per quarter. Also, given that the remaining borrowings of 500 billion KRW are similar in scale to Doosan Heavy Industries' operating profit of 507.8 billion KRW in the first half of this year, it is calculated that Doosan Group can repay all debts with its own business profits in the second half of this year.

In June last year, Doosan Group signed a financial structure improvement agreement on the condition of receiving emergency funds of 3 trillion KRW from creditors. The original period proposed by the Korea Development Bank was three years. Unlike the past practice of pressuring companies to complete restructuring within one year, this was an order to take sufficient time to properly improve the corporate structure.

However, having experienced the effects of bold business restructuring during the IMF financial crisis, Doosan Group carried out faster and harsher restructuring than the creditors' demands. The group sold off its valuable businesses one after another, including Club Mow CC, Doosan Tower, Doosan Solus, and Doosan Motrol BG, and even transferred its core affiliate Doosan Infracore to the Hyundai Heavy Industries-KDBI consortium. At the same time, it conducted a paid-in capital increase of 1.3 trillion KRW in Doosan Heavy Industries to secure additional funds, and the owner family also contributed by donating Doosan Fuel Cell shares worth 600 billion KRW free of charge.

Through the prompt implementation of the financial structure improvement plan, Doosan Group is expected to exit the creditor management system within this year, 1.5 years earlier than initially anticipated. Immediately after announcing the improvement plan, Doosan Group Chairman Park Jung-won emphasized in a message to employees, "I promise to repay the sacrifices of our employees by overcoming the crisis as soon as possible and achieving our goals."

Meanwhile, not only the effects of restructuring but also the group's affiliates' own businesses are showing clear recovery. Recently, Doosan Heavy Industries succeeded in achieving operating profit for two consecutive quarters and secured orders exceeding 2.3 trillion KRW in the first half of this year alone. The annual order target for this year was set at 8.6 trillion KRW, a 57% increase from the previous year, and orders in the 8 trillion KRW range are expected for next year and the year after. The holding company Doosan Co., Ltd. also recorded record-breaking performance in its Electronics BG business producing semiconductor core materials (copper-clad laminates), maintaining a profit trend for two consecutive quarters.

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