Korea Development Bank and Export-Import Bank of Korea will begin injecting emergency fresh funds next week into ailing Daewoo Shipbuilding & Marine Engineering, which has been facing a massive cash shortage crisis.

According to the creditors Thursday, both Korea Development Bank and Export-Import Bank of Korea will each extend 100 billion won ($89 million) for a total of 200 billion won to the company Monday. 

Creditors initially planned to extend financial assistance to DSME last month, however, their fiscal rescue plan had been delayed after an individual investor filed a suit against a court decision for the original 2.9 trillion-won debt rescheduling package.

DSME has been suffering from severe liquidity issues due to heavy financial losses regarding its offshore projects.

In return for the bailout loan, DSME has agreed to implement self-rescue measures worth some 5.3 trillion won until next year. The company has already cut its workforce and sold off non-essential assets, saving the shipbuilder roughly 1.8 trillion won so far.

By Julie Jackson (juliejackson@heraldcorp.com)