Doosan Group said Monday it finalized a self-rescue plan to secure 3 trillion won ($2.4 billion) by selling assets and reducing costs to improve struggling Doosan Heavy Industries’ financial structure. Minutes later, its main creditors released a statement, saying they accept the plan and have begun reviewing additional financial support.
“Even if the recovery of the global economy and power generation market are delayed, Doosan will make self-rescue efforts to improve its financial structure by more than 3 trillion won to ensure that it has the highest level of financial soundness,” said a Doosan Group spokesperson.
The plan aims to secure more than 3 trillion won through self-rescue efforts that include asset sales and cost reduction to improve Doosan Heavy’s financial structure to a strict level and push for early normalization of the management, the group said.
In a joint statement, creditors the Export-Import Bank of Korea and the Korea Development Bank said they decided to accept the plan and they would prepare measures “to normalize Doosan Heavy’s management by May as soon as the results of the ongoing due diligence are completed.”
Creditors are reportedly considering additional support measures worth about 800 billion won.
To aid in Doosan Heavy’s revival, Doosan said each affiliate will push for “a paid-in capital increase and asset sale” through necessary procedures such as going through consensus from the board of directors. Doosan Heavy will also make high-intensity efforts to push for a paid-in capital increase and proceed with the sale of non-core assets, the group said.
Doosan Heavy will also focus its efforts on revamping its business structure. It decided to focus its capabilities on future innovative technology projects, setting up two areas -- gas turbine power generation project and renewable energy project -- as major pillars of its business reorganization.
Doosan Heavy, hit hard by the government’s nuclear-free energy policy, has 4.2 trillion won in loans due this year. That includes 1.25 trillion won in corporate bonds, 1.1 trillion won in state-run bank loans, 780 billion won in commercial banks, 360 billion won in foreign banks and 700 billion won in corporate bills and electronic short-term bonds.
By Shin Ji-hye (email@example.com