Doosan Heavy sinks on construction halt of 2 nuke reactors

Doosan Heavy Industries & Construction Co., South Korea's top power equipment maker, traded sharply lower Wednesday after the government said it would halt the construction of two nuclear reactors for three months in order to gauge public opinion on the atomic power generation.

Doosan Heavy stocks were trading at 20,600 won ($18) on the Seoul bourse as of 1:30 p.m., down 4.63 percent from the previous session's close and nearing their lowest level in one year.

On Tuesday, the government said the construction of the two reactors -- Shin Kori No. 5 and Shin Kori No. 6 -- will be suspended so policymakers can decide whether to scrap or move forward with the building project.

"Uncertainties will continue, and financial damage is inevitable should the project be scrapped," said Yoo Je-hyun, an analyst at Mirae Asset-Daewoo Securities.

The project to construct two nuclear reactors in the region near Busan, some 400 kilometers southeast of Seoul, has been led by a consortium, including Doosan Heavy and Samsung C&T Corp.

Doosan Heavy's potential loss may be larger than expected if the project is permanently scrapped. Under the project, Doosan Heavy supplies steam turbine, boilers and other key equipment for the facilities.

The overall potential losses, if the project is nixed, are estimated at 2.6 trillion won, according to the government. Some 1.6 trillion won has been already spent on the project.

The planned suspension of the construction of the two reactors, some 30 percent of whose construction has been finished, came as South Korea's new President Moon Jae-in vowed to stop building nuclear power plants and phase out those that are already in operation.

Earlier this month, the country's oldest nuclear power plant, the Kori-1, was permanently shut down.

President Moon said earlier the government will "secure a public consensus" on the fate of nuclear power generation in the near future, while reiterating his earlier pledge to permanently shut down at least 10 aged, coal-fired power plants before his five-year term ends, a move aimed at reducing greenhouse gas and fine dust emissions.

Last year, around one-third of power in the country was supplied by nuclear power plants. South Korea has 24 nuclear reactors not counting the Kori-1 unit. (Yonhap)