Hanwha Group, the new owner of Daewoo Shipbuilding and Marine Engineering, took the first step toward a fresh start for the shipbuilder by rebranding it to Hanwha Ocean at a shareholders meeting on Tuesday.
This is the second rebranding in the world’s fourth-largest shipbuilder’s history spanning 45 years.
The previous name change occurred in 1978, when DSME was acquired by the now-defunct Daewoo Group.
At the shareholders' meeting at Daewoo Marine Ocean Plaza in Geoje, South Gyeongsang Province, Kwon Hyuk-woong, vice chairman and president of the support division of Hanwha Corp., was appointed as the new CEO of the latest Hanwha unit.
Later in the day, Hanwha, the nation's seventh-largest conglomerate, also completed its planned payment to acquire newly issued shares of DSME for 2 trillion won ($1.52 billion). The group has become the largest shareholder of Hanwha Ocean with 49.3 percent, while the state-run Korea Development Bank remains the No. 2 shareholder with 28.2 percent.
The corporate rebranding came a month after conditional approval was granted for the high-profile acquisition by South Korea’s antitrust watchdog.
Under the conditions of the approval, Hanwha is required to submit periodic reports to the Fair Trade Commission every six months for three years.
These reports will detail specific actions taken by Hanwha to promote fair pricing practices and prevent any form of discrimination against rivals in the market for military vessel equipment.
Hyundai Heavy Industries, HJ Shipbuilding and Construction and SK Oceanplant, previously known as Samkang M&T, are the major rival firms in the battleship business in Korea.
Ahead of the Korean antitrust watchdog's decision, the takeover deal has obtained the required approval from seven foreign antitrust regulators: Britain, China, the European Union, Japan, Singapore, Turkey and Vietnam.
The regulatory decision in Korea came approximately four months after Hanwha initially submitted its proposal for the review of the DSME takeover on Dec. 19.
This acquisition has been long-awaited by Hanwha, which has had its sights set on DSME for nearly 14 years.
In 2009, Hanwha made its first attempt to acquire DSME, but failed to do so. At the time, KDB sought to sell its majority stake worth $5 billion, but the two parties failed to narrow differences over financial terms.
The acquisition by Hanwha also marks the conclusion of DSME's prolonged debt rescheduling program, which had been in effect since 2001.
Hanwha is anticipated to put its efforts into revitalizing the shipbuilder's financial performance.
In the first quarter of this year alone, DSME reported an operating loss of 62.8 billion won, with a cumulative loss of 3.4 trillion won over the past two years.
As of the end of last year, DSME's debt ratio stood at a sizable 1,542.4 percent.
