Creditors Putting Pressure on Samsung Heavy

 

SHI has submitted its self-rescue plan to its main creditor, the state-run KDB, the Korea Herald reports citing a company official as saying on Tuesday.

 

The plan, aimed at restoring the company’s liquidity, reportedly includes up to 1,500 job cuts, selling of KRW 200 billion worth (USD 169 million) of real estate assets and disposing of stakes in Doosan Engine.

 

SHI’s move is in line with the three-track plan revealed by the country’s financial regulator, the Financial Services Commission, which targets restructuring of vulnerable industries which were hit by a global slowdown, such as shipping and shipbuilding.

 

The last time a Samsung unit submitted a self-restructuring plan in return for a debt relief was during the Asian financial crisis in the late 1990s. The shipyard is in its worst crisis with orders stop coming in from October last year.

 

In Samsung Heavy Industries, Samsung Electronics is the largest shareholder with a shareholding of 17.62% while Samsung Securities and Samsung Electro-Mechanics own 3.38% and 2.39%, respectively.  

 

In addition, rumors are circulating that the Samsung Group will dispose of Samsung Heavy Industries although the group is denying the rumor. Under the circumstances, the tension between the business group and the creditors is likely to be on the rise.