South Korea’s Daewoo Shipbuilding & Marine Engineering Co. (DSME) has decided to sell its joint venture in Romania to a leading Dutch shipbuilder as part of efforts to shore up its finances.
The Korean company said on Sunday it has entered into an agreement with Dutch-based Damen Shipyards Group to sell its 51 percent stake in Daewoo Mangalia Heavy Industries for about 29 billion won ($25.9 million). The companies are aiming to complete the deal by Nov. 29.
Daewoo Mangalia Heavy Industries was established in 1997 as a joint venture between DSME and Romania’s state-run 2 Mai Mangalia Shipyard. In just four years, it became one of Romania’s top ten companies but fell into the red following the financial crisis of 2008 due to reduced orders, delayed production and mounting losses. DSME had started talks with Damen to sell its Romanian shipyard since early 2016.
“The sale is expected to improve corporate finances and boost profitability,” said a DSME official.
After teetering on the brink of collapse last year, the debt-ridden Korean shipbuilder has been slowly moving toward recovery helped by additional loans from lenders and stringent self-help measures. In September, it won a $820 million order from a European shipping company, its largest deal in two years.
By Moon Ji-woong and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]