South Korea spending US$2.6B to keep Daewoo Shipbuilding afloat
by Youkyung Lee, The Associated Press
The government estimates the cost of letting the shipbuilder fail would be too much for the country's economy; State-owned Korea Development Bank took over struggling Daewoo in 2000
SEOUL, Korea, Republic Of—South Korea will inject 2.9 trillion won (US$2.6 billion) into Daewoo Shipbuilding & Marine Engineering Co. to keep the world’s second-largest shipbuilder from going bankrupt.
Financial Supervisory Commission said March 23 that the decision to provide another capital injection to Daewoo comes as its debt begins to mature next month.
The government estimates the cost of letting the shipbuilder fail would be too much for the country’s economy. State-owned Korea Development Bank took over Daewoo in 2000.
It received 4.2 trillion won from the government in 2015 and another 2.8 trillion won in November to shore up its capital.
Despite heavy job cuts and other restructuring efforts, the company reported an annual net loss of 2.7 trillion won in 2016.
