Selling Off Overseas Subsidiaries
It has been found that Daewoo Shipbuilding & Marine Engineering (DSME) liquidated Pangea LNG B.V., one of its subsidiaries abroad, in June this year.
Pangea LNG was established in 2012, fully invested by DSME, to participate in shale gas development projects in the United States and Israel. DSME was planning to obtain more orders for floating LNG production, storage and offloading units for transporting shale gas by working with shale gas developers via Pangea LNG. However, it decided to liquidate Pangea LNG after liquidity problems arose in 2015, which led to its decision to dispose of non-shipbuilding subsidiaries.
D&H Solutions AS, another DSME subsidiary for natural resource development, is being liquidated, too. DSME set up D&H Solutions in Norway in 2010 for offshore mining. Each of Pangea LNG and D&H Solutions has been in the red all the way since day one.
When it comes to Pangea LNG, DSME has recovered less than 100 million won (US$900,000) by liquidating it although its starting capital amounted to 20 billion won (US$18 million). DSME lent 4.5 billion won (US$4.0 million) to D&H Solutions until the second quarter of this year, too.
DSME is planning to sell or liquidate the other subsidiaries in the near future as well. For example, it is going to liquidate DeWind, the wind power developer that has been regarded as the main culprit of DSME’s insolvency, if no buyer appears by the end of this year. DSME has lent approximately 80 billion won (US$72 million) to DeWind. “Actual losses are likely to be petty in that the losses expected to follow the liquidation of the subsidiaries can be covered by the allowance for bad debts,” DSME explained.