Only Matter of Time
Daewoo Shipbuilding & Marine Engineering (DSME) is about to announce that it has won additional orders worth the remaining US$1.4 billion (1.55 trillion won) out of US$2 billion (2.22 trillion won) of this year’s order forecasts, except for US$600 million (665.1 billion won) worth of the existing orders received.
A senior government official said on March 27, “Contracts worth US$2 billion (2.22 trillion won) of this year’s order forecasts are already in the hands of DSME. DSME will win more new orders in the future. There should not be an error worth even US$100 million (110.85 billion won) in the forecasts this time. So, this is a conservative estimate.”
DSME’s creditors unveiled their financial support plans on the 23rd, and expected that the company will receive US$2 billion (2.22 trillion won) worth of orders this year. The government believes that it is only a matter of time before DSME obtains contracts worth the remaining US$1.4 billion (1.55 trillion won), except for US$600 million (665.1 billion won) of orders currently received.
Industry sources say that DSME is highly likely to clinch orders to build three very large crude carriers (VLCCs) worth US$250 million (277.13 billion won) from Maran Tankers Management. DSME is also said that it is currently in final negotiations to construct five liquefied natural gas (LNG) carriers worth US$900 million to 1 billion (998.65 billion won to 1.11 trillion won) with an unknown ship owner. Last month, DSME signed a letter of Intent (LOI) with U.S.-based Excelerate Energy for the delivery of up to seven floating LNG storage and regasification units (LNG-FSRUs). Under the LOI, Excelerate has the option to order one FSRU in the second quarter of 2017 and up to six more FSRUs later.
In addition, DSME plans to aggressively negotiate with Angolan state oil firm Sonangol, which delayed the delivery of drill ships again to the end of May. The additional support of 2.9 trillion won (US$261.61 million) will help DSME’s cash flow. Another senior government official said, “When bond holders, including the National Pension Service, know the current situations such e-mails and contract terms exchanged with Sonangol, they will have a wider range of decision. Until now, the issues related to business secret have been unknown.”