Government Support Totals 1.6 Tril. Won
In addition to the emergency fund support of one trillion won, the Korean government has decided to support Doosan Heavy Industries & Construction by converting its 600 billion won worth of foreign currency bonds falling due this April into loans. As a result, the amount of government support for Doosan Heavy Industries & Construction will rise to 1.6 trillion won.
The foreign currency bonds fall due on April 27. The Export & Import Bank of Korea provided a payment guarantee when Doosan Heavy issued the bonds in April 2015. At the time, the company did not have the international credit rating required to issue foreign currency public bonds, so the state-run bank, which has the same credit rating as the Korean government, guaranteed the payment.
As a result, the amount of the government-owned banks’ support for Doosan Heavy Industries and Construction increased to 1.6 trillion won. Previously, in March, the Korea Development Bank and the Export-Import Bank of Korea provided one trillion won in emergency funds to Doosan Heavy Industries & Construction suffering a financial crisis.
However, 4.27 trillion won of Doosan Heavy Industries & Construction's total borrowings of 4.92 trillion won will reach its maturity this year. This fact makes it inevitable for the ailing company to receive additional financial support. In this regard, creditors' position is that they will focus on the contents of the Doosan Group's self-help plan.
"We expect that the Doosan Group will come up with a self-help plan internally through due diligence work among others," the Korea Development Bank said. "Additional support for Doosan will be given after we review the plan."