According to sources, creditors of South-Korea’s Daewoo Shipbuilding & Marine Engineering urged the company’s workers to refrain from going on strike, saying that it would deter the ongoing efforts to restructure the financially shaky firm.
Sources state that about 7,000 unionized workers at Daewoo Shipbuilding’s yards are scheduled to vote on whether or not they will launch a strike, claiming that the shipbuilder’s restructuring schemes submitted to its creditors negatively impacts the workers employment.
The results of the decision to strike is expected to come out by late Tuesday.
The company and union, in particular, are also at odds over the plan to slash the workforce by an additional 2,300 to 10,000 by 2019.
Last year, Daewoo Shipbuilding’s creditors provided KRW 4.2tn ($3.58bn) in financial aid to prevent its workers from going on a strike. Since August 2015, the creditors, led by state-run Korea Development Bank, have provided KRW 3.2tn in financial help to the shipbuilder.
Last week, the shipbuilder mapped out a KRW 5.3tn self-rescue plan, approved by its creditors, which includes asset sales and a spin-off of key business units.
Separately, the union of Hyundai Heavy Industries is set to hold a meeting of its representatives on Friday to decide on whether to go on strike.
Source: Korea Times
According to sources, South Korea-based Samsung Heavy Industries and Hyundai Heavy Industries received lender approval on their respective restructuring plans.
Apart from headcount reduction, Hyundai Heavy intends to sell real estate, stock, holdings and non-core businesses for balance sheet improvements totaling to $3bn.
Samsung Heavy Industries’ creditor group, led by Korea Development Bank, has provisionally approved a $1.25bn restructuring plan for the firm. SHI’s plan reportedly includes measures similar to HHI’s; although details were not available.
Daewoo Shipbuilding and Marine Engineering, have announced plans to trim wages by 20% and lay off executives. It has announced workforce reductions of 2,300 employees by 2019.
Daewoo also intends to sell its Seoul headquarters building to raise funds.
The “Big Three” reported combined net losses of $4.9bn in 2015, negatively impacted by a marked decline in shipbuilding orders in offshore, bulk and container shipping, and the yards secured only a handful of orders between them in the first months of 2016.
Separately, South Korea’s government is already discussing ways to shore up state-backed creditor banks like KDB and KEXIM in anticipation of the yards’ future needs for large-scale assistance.
Source: The Maritime Executive
South Korea’s top 3 shipbuilders, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, have come up with their second stage of restructuring plans to their creditors, worth some $5bn, collectively.
The plans consist of a combination of company restructuring, selling of assets and reduction of wages.
Shipbuilder Daewoo is looking to divest its defense industry unit, which produces military ships and submarines, in order to free up much needed capital.
Daewoo is also said to be looking to offload certain of its properties, including its office building in Seoul, appraised at an estimated value of $150m.
Daewoo, as well as Samsung, are also looking to sell their floating docks.
But sales could be difficult, with the current global ship-building industry in recession and demand low.
Hyundai has seen some 8,000 employees leave the company through regular and voluntary resignations since 2015, but they are encouraging more to opt for early retirement packages in order to make further cuts to the wage bill.
Daewoo and Samsung are also looking to reduce staff by about a thousand each this year.
Source: Hellenic Shipping News