DSME Denies Job Cut Plan

Daewoo Shipbuilding & Marine Engineering (DSME) said on Tuesday that its restructuring will focus on selling noncore assets, not workforce reduction.

The Korea Herald reports that rumors about possible job cuts emerged over the weekend after company CEO Jung Sung-leep announced a restructuring program to cut costs, including relocating manpower and job rotation.

The shipyard has suffered a reduced income as a result of the global drop in shipbuilding, and it is expected to post an operating loss of up to three trillion won ($2.6 billion) in the second quarter.

The company is being investigated for potentially concealing a cumulative loss of around two trillion won ($1.72 billion) from its balance sheet last year. 

The state-run Korean Development Bank (KDB), DSME’s largest shareholder with a 31.46 percent stake, decided on Sunday to launch a large-scale debt restructuring process, reports the Korea Herald. DSME’s largest creditor The Export Import Bank of Korea has stated it will support KDB in securing liquidity for the yard.

Despite its financial concerns, DSME received an order for a new LNG carrier this week. Greek shipowner Chandris placed the order for a 173,400 cubic meter LNG carrier after ordering a first vessel in December 2014.

Last year, the company won 37 orders from a total of 66 LNG carrier orders in the global market, showing unequaled competitiveness, reports Business Korea.