Labor and management at Daewoo Shipbuilding & Marine Engineering (DSME) submitted to its creditors a confirmation to carry out a “self-rescue” plan. Through this plan, DSME will promote normalization of operations in terms of obtaining orders from customers next year after dealing with capital impairments this year.
On 18 November, the Korea Development Bank (KDB) held a meeting of its board of directors and agreed to invest an additional KRW 1.8 trillion (USD 1.5 billion) in DSME. The Korea Export-Import Bank will also make a decision on whether to purchase perpetual bonds worth KRW 1 trillion (USD 847 million) in December after consultation with the government.
DSME has stated that it will reduce its operations by 50 percent towards normalization. Sales will be reduced to KRW 7 trillion (USD 5.9 billion) per year, which is 50 percent of its sales in the past. DSME also has plans to earn KRW 4 trillion (USD 3.3 billion) in the shipbuilding sector, KRW 2 trillion (USD 1.6 billion) in the offshore plant sector, and KRW 1 trillion (USD 847 million) in the special ship sector. The offshore plant sector will be reduced to 25 percent of its current status. The company emphasized that, “Our workforce was 12,600 by the end of September and will be reduced to less than 10,000 workers by the end of this year, less than 8,500 workers by 2017, and less than 8,000 workers by 2018.” The number of workers who have left DSME since October of last year is approximately 2,200.