Daewoo Shipbuilding to look for domestic buyer: KDB

The state-run Korea Development Bank (KDB), the main creditor of Daewoo Shipbuilding and Marine Engineering Co., said on Thursday it will look for a domestic buyer of the debt-ridden company, after its second attempt to sell the shipbuilder was blocked by the European Commission.

KDB Chairman Lee Dong-gull told an online news conference that creditor banks of Daewoo Shipbuilding are reviewing Plan B to find a new owner from the private sector, who can inject fresh capital into the troubled company.  

The European Commission on Jan. 13 vetoed the proposed combination of Hyundai Heavy Industries Co. and Daewoo Shipbuilding due to monopoly concerns. It said the two Korean shipbuilders are among the three largest players in the very concentrated market of large liquefied natural gas (LNG) carriers.

"It's impossible to sell it to a foreign company since Daewoo Shipbuilding has technologies for warships and special vessels and sophisticated technologies to build LNG ships," Lee told reporters. 

"We'll find a new owner from within this country. ... We're open to all possibilities, including a small-sized company acquiring a big company (like Daewoo Shipbuilding)."

Daewoo Shipbuilding has been under creditor protection since 2000, after it fell into negative capital in the wake of the 1997-98 Asian financial crisis.

TWO ABORTED ATTEMPTS

Their first attempt to sell the shipbuilder fell through, after South Korea’s seventh-largest conglomerate Hanwha Group withdrew its bid in 2008 in the wake of the global financial crisis.

In March 2019, Hyundai Heavy Industries Co., the world's largest shipbuilder, agreed to acquire a 55.7% stake in the smaller rival from KDB for 2 trillion won, alongside a pledge to inject 1.5 trillion won into Daewoo. 

Lee said the collapsed merger between the two South Korean shipbuilders foiled the government plan to consolidate the country's shipbuilding industry into two big players: the merged entity between Hyundai and Daewoo and Samsung Heavy Industries Co.

He urged Hyundai Heavy to counter the European Commission's veto to its planned acquisition of Daewoo with legal action, criticizing it as a decision based on the self-interest of the continent.

Write to Kyung-Min Kang and So-Ram Jung at kkm1026@hankyung.com
Yeonhee Kim edited this article.