Creditors urge Daewoo Shipbuilding’s workers not to go on strike

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

Hyundai Merchant’s shares fall on concern of share dilution in debt swap

Shares of Hyundai Merchant Marine Co. plunged 19% in trade today, the most in 3 months, as investors worried that the company’s debt-to-equity exchange plan would dilute their shareholding.

Hyundai Merchant’s stock declined to KRW 15,000 in trade in Seoul, today.Rival firm Hanjin Shipping‘s shares also dropped as much as 9.2%, as investors feared a similar outcome, as the company is in negotiations with lenders about a possible swap, similar to Hyundai’s.

Hyundai Merchant will issue 236m new shares to its creditor banks, bondholders and shipowners in the debt-for-equity swap as part of its restructuring plan.

The plan follows South Korea’s Finance Minister Yoo Il Ho’s call for restructuring in the shipping industry as weak demand and dwindling cash levels hurt the companies.

The nation also prepares to start a KRW 11tn fund aimed at restructuring its ailing shipbuilding industry.

Source: Bloomberg