In a welcome move which temporarily diverts the financial pain suffered by South Korean shipbuilders, Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding & Marine Engineering Co (DSME) have reached preliminary deals, collectively estimated at $2.4bn with an Iranian shipping company Islamic Republic of Iran Shipping Lines (IRISL) and an Iranian petroleum company Iranian Offshore Oil Co. (IOOC) to build ships, tankers and offshore equipment.
However, the efforts have fallen short of reaching official contracts as the companies have just signed memorandum of understandings (MOUs).
Hyundai Mipo Dockyard, a subsidiary of HHI, signed a MOU with IRISL for orders of 10 tankers and at least six handy-size bulk carriers.
Hyundai Heavy was also in talks with IRISL for building around six container carriers with a 14,500 TEU capacity. In this deal, however, HHI was known to be competing with China’s Dalian Shipbuilding Industry Co.
IRISL, which operates about 115 oceangoing vessels, with a total of capacity of 3.3m tons, has an aging fleet which requires urgent replacement. While IRISL was modernizing its vessels, the company was chartering ships from foreign shipping companies including Greek carriers.
DSME was in negotiations with IOOC to seal orders of at least five jack-up rigs. But the deal also reached just signing a MOU.
Separately, Daewoo’s creditors have urged the shipbuilder’s workers to refrain from going on a strike as the restructuring plan outlined by the company had proposed job cuts in order to stay viable, financially.
Source: Business Korea