NPS, KDB ‘find common ground’ on DSME rescue plan
[THE INVESTOR] Ending days of suspense, Daewoo Shipbuilding & Marine Engineering’s major bondholder National Pension Service and main creditor Korea Development Bank have found common ground to save the ailing shipbuilder, according to a top official involved in the negotiations.
“We found common ground thanks to KDB’s willingness to negotiate, as the main shareholder has shown a strong will to revive the shipyard and minimize losses for the fund,” NPS CIO Kang Myun-wook said on April 14, before a key meeting to finalize the debt restructuring plan.
A day earlier, he held a meeting with KDB CEO Lee Dong Geol after which officials from both sides began to renegotiate details of the debt-to-equity scheme.
His comments reflect a shift in stance of the state-run fund, which holds 390 billion won ($349 million) in DSME corporate bonds, accounting for almost 30 percent of the total of 1.35 trillion won.
According to the rescue plan suggest by the main creditors -- KDB and Export-Import Bank of Korea -- bondholders are required to swap up to 50 percent of their debt to equity with a three-year grace period for unsecured loans.
NPS has been at odds over the rescue package asking for more concrete assessment reports from the creditors and renegotiation of the terms for debt-to-equity swap.
Earlier this week, it was hesitant to accept the plan raising doubts over DSME’s financial situation.
If NPS gives the go-ahead, chances are high that the deal will be ratified at the upcoming bondholders’ meeting on April 17-18.
If the bondholders fail to reach an agreement, the shipbuilder will put under a prepackaged plan, a combination of court receivership and workout.
Meanwhile, the labor union of DSME visited the headquarters of NPS in Jeonju, North Jeolla Province, to push for the deal.
“The company and the fate of 200,000 people including 30,000 DSME employees, workers of subsidiaries and their families all depend on NPS’ decision,” the union said in a statement.
By Park Ga-young (email@example.com)