Loss-making shipyards struggling to sell assets, cut costs

SEOUL, Nov. 25 (Yonhap) -- South Korean shipbuilders are seeking to sell assets and cut costs, as they struggle with massive losses stemming from a protracted industry slump and rising costs, industry sources said Wednesday.

The country's big-three shipyards -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. -- are rolling out a set of self-rescue measures that will save a combined 2.5 trillion won (US$2.17 billion), they said.

Daewoo Shipbuilding is seeking to cut costs, and sell some affiliates and its headquarters office building in Seoul, saving 1.85 trillion won in cash. Its creditors, led by the state-run Korea Development Bank, are set to inject a total of 4 trillion won into the loss-making shipbuilder.

Hyundai Heavy is reducing the wages of its senior staff and cutting costs, which are expected to help save some 500 billion won.

The three companies logged massive losses of a combined 2.1 trillion won in the third quarter, largely due to a series of order cancellations and a delay in the construction of offshore facilities.

The combined operating loss is estimated at 7.8 trillion won for the year, marking the first time the top three shipyards have suffered operating losses on an annual basis.

sam@yna.co.kr
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