• Home
  • News
  • S.Korea's Hanwha Group to invest $1.4bln for Daewoo Shipbuilding - BusinessKorea
  • 2022 September 27 15:37

    S.Korea's Hanwha Group to invest $1.4bln for Daewoo Shipbuilding - BusinessKorea

    Since 2015, 4.1 trillion won in Korean taxpayers’ money has been put into Daewoo Shipbuilding and Marine Engineering (DSME) to keep the ailing company afloat, but it will be sold off to Hanwha Group for no more than two trillion won, which is less than half of the public money spent on it, according to BusinessKorea.

    In particular, Hanwha will acquire DSME not by directly purchasing the 55.7 percent stake from Korea Development Bank but by participating in DSME's capital increase through third-party allocation of new shares. Hanwha will secure a 49.3 percent stake in DSME this way, but the money it will pay for the stake acquisition will go to DSME, not to KDB. This means that KDB will not recover a single penny of the funds it invested to normalize DSME, although its stake will be lowered from 55.7 percent to 28.3 percent.

    The proceeds from the sale of DSME's new shares will be used to normalize the shipbuilder, which is in immediate need of money as its debt ratio reached 379 percent on a consolidated basis at the end of last year.

    Hanwha will acquire DSME at a price that is one-third of the level it offered 13 years ago. In 2008, it tried to take over DSME by investing more than 6 trillion won, but gave up the acquisition bid due to the global financial crisis.

    This time, Hanwha was initially interested in the special ship unit of DSME’s defense industry division. However, the special ship unit and the merchant ship unit share shipbuilding docks, so it is difficult to distinguish assets. Furthermore, the local community around DSME's dockyard was opposed to splitting the shipbuilder. Then, KDB recommended Hanwha to take over the whole company.

    By taking over DSME, Hanwha will secure the ability to build submarines and destroyers, which will help the group emerge as an integrated defense company capable of producing land, air and sea defense systems. On top of that, DSME has secured a large shipbuilding order backlog until 2026 thanks to the recent boom in the liquefied natural gas (LNG) carrier sector.

    However, Hanwha is faced with many tough challenges. DSME incurred a loss of 1.75 trillion won on a consolidated basis in 2021 and its debts total 8.4 trillion won. Furthermore, the macroeconomic environment is rapidly deteriorating due to global inflation.

    DSME's shipbuilding facilities and equipment are in need of improvement, which requires steady funding. “DSME needs to invest in the development of eco-friendly next-generation engines to sharpen its competitive edge against chasing Chinese shipbuilders,” an industry insider said.

    Reestablishing a relationship with the labor union is also a burden for Hanwha. The group may have trouble in negotiating wage hikes and welfare benefits with DSME unionists. On hearing news about Hanwha’s takeover of DSME, the DSME branch of the National Metal Workers’ Union reacted strongly. It expressed opposition in a statement, describing KDB's stake sale as a "one-sided, closed-door deal that gave special favors to Hanwha."

2022 November 27

12:42 Carnival Cruise Line's flagship makes first-ever Carribean call with visit to Grand Turk inaugural voyage
12:09 Four WTIVs equipped with SCHOTTEL propulsion systems for Ouyang Offshore in Shanghai
10:46 Global supply chains are becoming increasingly "green”

2022 November 26

15:16 Shanghai Port enters a new stage of green transformation
14:39 Moran Towing orders pair of tugs from Master Boat Builders
12:37 Helsinki Shipyard invites bids for sale of one uncompleted vessel
10:19 EST-Floattech signs contract with Rolls-Royce Power Systems for long term cooperation

2022 November 25

18:27 Valenciaport studyies the expansion of ro-ro and reefer traffic with northern Morocco
18:07 ABB to equip 10 COSCO Shipping’s boxships with shaft generators - Offshore Energy
17:55 Draft amendments into Rules for subsidizing of large ships construction published on ad hoc federal portal
17:27 China-U.S. joint venture unveils new fleet brand of cruise ships - Xinhua
17:00 Engine work completed for Port of Antwerp-Bruges methanol-fuelled tug retrofit - Ship & Bunker
16:59 FESCO set to open new shipping service from Alexandria port to Novorossiysk
16:35 Russia’s container market fell by 15.8%, year-on-year, to 4.5 million TEU
16:12 Jan De Nul successfully connects TenneT’s electricity network and signs contract for the acquisition of the offshore support vessel
15:48 MOL to build two ocean-going cruise ships
15:33 RUB 2 billion to be invested in new grain terminal within SEZ Lotos in Astrakhan Region
15:04 CODELCO and NYK Bulk Projects to jointly study decarbonized transportation of copper products
14:42 Stolthaven Terminals and Deloitte partner on a decarbonisation pilot
14:18 A.P. Moller - Maersk flags off a new dedicated weekly rail service from NCR to APM Terminals Pipavav
13:45 TES and EWE to build 500MW electrolyser at Wilhelmshaven
13:40 Proman Stena Bulk officially names new methanol-fuelled tanker Stena Pro Patria
12:31 Ningbo Containerized Freight Index decease significantly in November 2022
12:14 China ports container volume rises 4.0% in January - October 2022
11:46 Tariff for some services changed in the seaport of Ust-Luga
11:42 ZeroNorth’s new Vessel Optimisation service delivers immediate emissions reductions
11:13 Volumes continue to grow strongly on North America East Coast - Sea-Intelligence
10:35 China's Ningbo-Zhoushan Port launches sea-rail container transport for NEV exports - Xinhua
10:17 RF Government to provide RUB 3.88 billion for subsidizing of cargo shipping to/from Kaliningrad Region
09:39 Yantar shipyard to build 7MW rescue ship of Project MPSV06M

2022 November 24

18:03 MEPSEAS South-East Asian marine protection project concludes
17:58 Nimofast signed a partnership with Kanfer Shipping to sell and deliver LNG via small-scale LNG
17:23 Cadeler triples fleet after ordering second hybrid jack-up installation vessel
16:59 James Fisher's first LNG dual-fuel tanker enters service
16:11 PetroChina completes first STS bunkering of LNG-powered ship in Shenzhen - S&P Global
15:34 Green NortH2 Energy receives EUR 2.3 million in R&D funding from Business Finland for the development of green hydrogen and ammonia production
14:58 Keppel O&M delivers first of three jackup rigs novated by Borr Driling to ADNOC Drilling
14:03 Consortium unveils their transformational bid for a Celtic Freeport
13:42 Silversea Cruises cuts steel for second Nova-class ship
13:22 Port of New York and New Jersey container volume up to 792,548 TEUs in October 2022
13:17 MABUX: Bunker Weekly Outlook, Week 47, 2022
12:53 Furetank granted state and EU climate investment support for installing shore power connection on a tanker
12:35 Chinese ports' container volume rose 4% to 240 million TEUs in January-October
11:22 Russia will need 400 dry cargo ships and tankers for its transport independence - Rosmorrechflot
11:16 HPC Hamburg Port Consulting to advise on new Tobago cruise terminal
10:51 ABS publishes detailed requirements for composite repairs
10:34 SMTU opens R&E Centre Digital Technologies for the Design and Construction of Marine Facilities SMTU-ASCON
10:14 Gunvor secures USD 1.645 billion credit facility
10:06 Ferries carried 37100 passengers and 24200 cars on the Kerch Strait line as of Nov 24
09:03 Flex LNG announces extension of time charters for three ships with Cheniere

2022 November 23

18:36 Adani Ports and Special Economic Zone receives the top ranking in Moody’s Global ESG rating
18:07 The Role of methanol in shipping’s energy transition explored at first London Methanol Summit
17:59 Ocean freight volumes in container segment forecasted to drop by 2.5%
17:42 Meyer Werft and Silversea celebrate steel cutting of Silver Ray
17:33 General Meeting on December 19 to vote on Uniper stabilization and thus ensure Germany’s gas supply
17:28 Uralchem to invest RUB 50 billion in construction of ammonia port in Taman
17:20 The President of Mozambique Filipe Nyusi inaugurates Coral-Sul FLNG installation
17:06 Seapeak orders five LNG newbuilds against long-term charters
16:42 Suriname to construct a deep-water port
16:16 First floating LNG terminal arrives at German port - AP