Samsung Heavy Industries may submit next week a self-restructuring plan to its creditor banks, as Korean dockyards ramp up their fight for survival amid a protracted slump in global shipbuilding.

Samsung, the smallest of the country’s Big Three shipyards, is currently drawing up steps to improve finances, while pressured by creditors to cut debt. 


Industry sources said its plans may include a 170 billion won ($145 million) sale of real estate assets, disposals of equity holdings worth 50 billion won and layoffs of around 1,500 workers. Samsung’s five-star hotel in the southern port of Geoje, where the company is based, is likely to be put up for sale, they said.

“There has been no timeline set (for Samsung Heavy’s self-help plan), but we hope it will arrive sometime next week,” said an official at state-run Korea Development Bank, the shipbuilder’s main creditor.

KDB’s chief executive Lee Dong-geol and Samsung Heavy CEO Park Dae-young are to hold a meeting later this week, local reports said.

Samsung’s biggest rivals at home – Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering – are also in a debt overhaul mode, selling assets and cutting staff.

Hyundai Heavy, the world’s largest shipyard, is moving to shed more staff, after letting go some 1,300 workers last year and 60 executives earlier this year. Local reports estimate that nearly 3,000 jobs may be cut.

Daewoo Shipbuilding, which appears to be deepest in trouble after reporting a record operating loss of over 5 trillion won in 2015, is also expected to soon unveil additional self-help measures.

The firm, nearly 50 percent owned by KDB as a result of a state bailout in late 1990s, received more than 4 trillion won in capital support from KDB and creditor banks last year. KDB requested the firm to do more if it wants to receive additional support. Daewoo may have to sell more assets, including its headquarter buildings in Seoul and cut more jobs, industry watchers said.

The trio logged a combined net loss of 7.7 trillion won last year. It was the first time that all three registered losses.

New shipbuilding orders have almost stopped for Korean yards, as a slump continues in the global industry with China’s economic slowdown. The three big players received orders worth $650 million in the first quarter of this year, 2.7 percent of last year’s full-year count.

By Lee Sun-young (milaya@heraldcorp.com)