Business Stabilization Letter
Daewoo Shipbuilding & Marine Engineering employers and employees submitted their letter of confirmation regarding business stabilization to the creditor bank Korea Development Bank (KDB) on November 17. Under the circumstances, the shipbuilder’s plan for recapitalization is likely to gather momentum.
Earlier, the KDB and the other creditors, such as the Export-Import Bank of Korea, prepared the recapitalization plan worth 2.8 trillion won but could not execute it because of the lack of consent on the part of the union. The employers and the union held successive negotiations over the issue this week.
According to the plan, the KDB is going to carry out a debt-equity swap worth 1.8 trillion won. In addition, capital addition can be made within this year once the articles of association is allowed to be changed in part and the capital is allowed to be reduced at the extraordinary shareholders' meeting scheduled for November 25. Then, the shipbuilder can be engaged in normal business activities out of capital impairment.
“We made the decision to submit the letter in order to prevent a receivership and protect the workers’ jobs and their rights to live,” said Hong Seong-tae, head of the Daewoo Shipbuilding & Marine Engineering Labor Union.