DSME strives to secure liquidity amid handover delays

Financially troubled Daewoo Shipbuilding and Marine Engineering is striving to secure liquidity amid a series of delays in the handover of ships.

US offshore driller Atwood Oceanics recently requested that the company postpone the delivery of two drill ships, citing a delay in a relevant project.

DSME was planning to hand each of the drill ships over to Atwood Oceanics in September next year and June 2018. The delivery date had already been put off twice.

The two parties signed two drill ship deals each in September 2012 and June 2013 at the total cost of $1.2 billion. The US offshore driller has not yet made the remaining $400 million payment.

“It is true that Atwood Oceanics asked for the delay. (The company) is negotiating over the details of the plan with the US firm,” said a DSME official.

A delay in the Sonangol project is also adding to the financial burden of the cash-strapped company. DSME’s bonds worth 940 billion won ($800 million) will mature starting from April next year.

Sonangol initially planned to take the two drill ships in summer, but the Angolan company had postponed it twice and asked for another delay, citing difficulties in securing the remaining $1 billion contract fee.

The shipbuilder said it decided to hire Millstein & Co. Managing Director Mark Walker to speed up the negotiation with Angola’s state-run oil firm Sonangol over the delay of the drill ship takeover.

Working with Hyundai Merchant Marine earlier this year, he played a key role in charter fee cut negotiations with 22 shipowners, which was the core of the business normalization plan.

By Lee Hyun-jeong (rene@heraldcorp.com)