Union of Daewoo Shipbuilding OKs demands of creditors

The union of Daewoo Shipbuilding & Marine Engineering Co. agreed to self-secure plans, officials said Monday, a move that could lead to an injection of additional funds from creditors.

"We made a final decision to submit a letter of consent to the creditors," Hyun Si-han, the head of the union, said in the country's southeastern island of Geoje Island, home to South Korea's shipyard operations.

Yoon Yo-han, a spokesman of Daewoo Shipbuilding in Seoul, said the management and labor are likely to submit the self-secure plans to creditors Tuesday.

The state-run Korea Development Bank, a key creditor, had warned that there will be no financial support unless Daewoo Shipbuilding submitted a letter of consent by Monday that calls for, among other things, a wage freeze and no strikes until the company is normalized.

Daewoo Shipbuilding, a major South Korean shipbuilder, suffered an operating loss of more than 3 trillion won in the first half of

2015 largely due to increased costs stemming from a delay in the construction of low-priced ships and offshore facilities.

The shipbuilder is pushing to restructure, including selling assets and reducing the number of its executives.

Its creditors, led by the Korea Development Bank, were devising a rescue plan for the shipbuilder that will likely include an injection of additional funds from its creditors, as well as a $5 billion refund guarantee on advance payments made to Daewoo Shipbuilding. (Yonhap)