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Daewoo Shipbuilding Debt Plan Teeters on Edge

(Kim Jaewon – Nikkei Asian Review)

Korea Development Bank’s proposal that creditors of embattled Daewoo Shipbuilding and Marine Engineering swap the company’s debt for equity could be derailed, as key bondholder the National Pension Service has accused the policy bank of bulldozing through its plan.

Fears are now rising that the state-owned shipbuilder is headed for court receivership, with the NPS accusing KDB of pushing for the debt-to-equity swap plan without consultation. NPS owns 388.7 billion won ($340.9 million) of corporate bonds in Daewoo Shipbuilding, or 29% of the total, while KDB owns a 79% stake in the company.

“We think the KDB’s plan is unfair, but the bank says it is taking more responsibility,” said Lee Soo-chul, a director at the NPS. “We need time to check the plan whether the proposed numbers are correct or not, but they say we should make a decision now.” Click here to read more.