Daewoo Shipbuilding says restructuring scheme going smoothly

Daewoo Shipbuilding & Marine Engineering Co., a major shipyard in South Korea, said Monday its restructuring scheme is going smoothly, with its three offshore facilities to be delivered on time.

"We expect our business result to remain in positive terrain going forward as our restructuring plan is being implemented as promised, and ships and offshore facilities will be delivered as scheduled," the shipbuilder said in a statement.

In the first half of the year, Daewoo Shipbuilding suffered a net loss of 1.19 trillion won ($1.08 billion), with its debt ratio exceeding 7,000 percent.

The shipbuilder said it will complete the sale of its headquarters building in downtown Seoul by the end of the month, a deal valued at 180 billion won, with noncore assets to be sold in the near future.

Last week, the shipbuilder said it would seek to cut its workforce by some 1,000 via an early retirement program amid a prolonged industrywide slump.

In October of last year, some 300 workers left Daewoo Shipbuilding through an early retirement scheme. Daewoo Shipbuilding said earlier it would cut its workforce to some 10,000 by 2020 through restructuring.

South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis, which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.

The country's top three shipyards -- Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. -- suffered a combined operating loss of 8.5 trillion won last year. The loss was due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with Daewoo Shipbuilding alone posting a 5.5 trillion-won loss.

The shipbuilders have recently drawn up sweeping self-rescue programs worth 10.35 trillion won in desperate bids to overcome the protracted slump and mounting losses. (Yonhap)