Doosan Heavy receives $813 mln in bailout from state policy lenders

30, Mar. 2020

(Photo courtesy of Doosan Heavy Industries & Construction)
(Photo courtesy of Doosan Heavy Industries & Construction)

SEOUL, AJU - Two state policy banks agreed to inject a bailout worth one trillion won ($813 million) into Doosan Heavy Industries & Construction, a key contractor in South Korea's energy industry, to ease its liquidity crunch aggravated by a global coronavirus pandemic.

Doosan Heavy said on Wednesday that it has signed a loan agreement with Korea Development Bank (KDB) and Korea Export-Import Bank (Eximbank) with assets such as shares and real estate provided as collateral. The company is also in talks with the lenders over the refinancing of maturing foreign debts totaling 600 billion won.

Doosan Heavy, saddled with four trillion won in short-term loans, has made self-rescue efforts to improve its financial structure, including voluntary retirement, but it has failed to ease financial woes because of COVID-19 that sparked an economic crisis and rattled financial markets.

The company promised to pay back its debt through restructuring, saying the bailout would be enough to cover borrowing and restructuring costs as cash will continue to come in through existing orders.

Doosan Heavy, which builds nuclear power plants, thermal power stations, turbines and generators and desalination plants, has disposed of non-core assets due to an uncertain business outlook caused by President Moon Jae-in's policy of phasing out nuclear power plants and others using fossil fuel.