Doosan Heavy Industries Bondholders' Management Graduation Signal... Final Button Fastened

Repayment in Short Timeframe Through Consultation with Creditors Using Paid-in Capital from Rights Offering

[Asia Economy Reporter Park Sun-mi] Doosan Heavy Industries & Construction has completed its rights offering, taking the final step to exit creditor management. The creditor group, led by KDB Industrial Bank and Korea Eximbank, plans to review the possibility of graduating Doosan Heavy Industries & Construction from the management system, considering the company's financial structure improvement.

According to financial sources on the 18th, Doosan Heavy Industries & Construction will begin negotiations with creditors on debt repayment as soon as the funds from the 1.15 trillion KRW rights offering are received on the payment date. Of the amount raised through the rights offering, 500 billion KRW will be repaid as quickly as possible. The remaining 650 billion KRW will be used as funds for investment in new businesses.

As of the end of the third quarter last year, Doosan Heavy Industries & Construction owed about 800 billion KRW to creditors. With a turnaround to profitability and improved cash flow, the company will be able to repay most of the remaining debt using the proceeds from the rights offering.

The ball is now in the creditors' court. Even if Doosan Heavy Industries & Construction repays all borrowed money, the creditors' decision is essential for graduating from the creditor management system. Earlier, Lee Dong-gul, chairman of KDB Industrial Bank, stated that if the financial restructuring efforts by Doosan Heavy Industries & Construction proceed smoothly, an external financial diagnosis will be conducted to comprehensively review sustainable financial soundness and decide on the management system status.

Doosan Heavy Industries & Construction signed a financial restructuring agreement with creditors in April 2020 and has since undertaken group-wide, rigorous financial restructuring efforts after receiving a total of 3 trillion KRW in liquidity support.

In 2020, funds were raised through ▲sale of Club Mow CC (185 billion KRW) ▲sale of Doosan Tower (800 billion KRW) ▲sale of Doosan Solus (690 billion KRW) ▲free transfer of 23% stake in Doosan PureCell by the owner family (600 billion KRW) ▲1.3 trillion KRW rights offering of Doosan Heavy Industries & Construction. Last year, sales of Doosan Infracore (850 billion KRW) and Doosan Construction shares (258 billion KRW) were conducted. This month, Doosan Heavy Industries & Construction carried out a 1.15 trillion KRW rights offering.

Improving performance at Doosan Heavy Industries & Construction is also a positive sign. The company posted an operating profit of 890.8 billion KRW on a consolidated basis last year, turning profitable compared to the previous year. During the same period, sales increased by 22.5% to 11.8077 trillion KRW, and net profit was 645.8 billion KRW, also returning to profit for the first time in eight years.

Credit rating agencies' assessments are also changing. NICE Credit Rating upgraded Doosan Heavy Industries & Construction's long-term credit rating outlook from stable to positive yesterday, opening the possibility of a credit rating upgrade. Improvements in performance and cash flow influenced the rating revision.

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