Doosan Heavy Needs Additional Funding
The Export-Import Bank of Korea has decided to convert Doosan Heavy Industries & Construction’s US$500 million foreign currency bonds into a loan. Earlier, Doosan made a request to that end with regard to the bonds maturing on April 27. The bank provided a payment guarantee for the bonds. As a result of the decision, the bank's outstanding loan and guarantee in Doosan have increased to 1.4 trillion won and decreased to 500 billion won, respectively.
Doosan’s financial difficulties are still ongoing even after the bank’s decision and creditors’ one trillion won loan determined last month. The company must repay 4.2 trillion won this year and it still needs 2.6 trillion won to do so. “Doosan’s outstanding borrowings from the market total 1.2 trillion won and the size of money that needs to be added will be confirmed after due diligence completion,” the bank explained. This means additional assistance is needed in spite of the conversion.
The bank is planning to make a decision on the additional assistance through negotiations with Doosan Group and an overall review of the group’s plan for bringing Doosan Heavy Industries & Construction back to normal, creditors’ financial burden, repayability, etc.
The plan is likely to come out in the first half of this year and the bank’s decision is expected to immediately follow the plan. The Export-Import Bank of Korea is not ruling out the possibility of a voluntary agreement. “We will choose the best option for business normalization after creditors look into the feasibility and viability of the plan and a professional consulting firm conducts due diligence,” it said.