Wednesday, February 21, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, October 30, 2015
S. Korea Bail out for Shipbuilder which Bails out US Shipbuilder
By Michael Hansen @ 3:30 AM :: 3402 Views

by Michael Hansen, Hawaii Shippers Council, October 29, 2015

South Korean online publication Chosun Ilbo reported on October 28th in an article entitled “Daewoo Shipbuilding to Get W5.2 Trillion Bailout” that state lenders will bail out the financially strapped Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME), the largest shipbuilding company in the world, with a U.S. $5 Billion rescue plan.

The two state-owned creditors are the Korea Development Bank (KDB) and the Export-Import Bank of Korea commonly known as the Korea Eximbank (KEXIM).

This follows from a Lloyd’s List report from October 12th entitled “Will South Korean taxpayers continue subsidizing newbuilding orders? Role of state lenders under public scrutiny after heavy losses at yards,” which predicted government backed bailouts for the major shipbuilding companies including DSME.

In our commentary to the Lloyd’s List article posted on October 13th, we referenced a U.S. expert in new ship construction with extensive experience in S. Korea who advised, without government subsidies, the major S. Korean shipbuilders would have to raise their prices by around 20%. That of course pales in comparison with the 500% premiums to build a oceangoing self-propelled ship in a major U.S. shipbuilding yard.

On October 22nd, we posted comments to an article from Business Korea describing how intimately involved DSME was with the design, sourcing of materials and equipment, and construction of the recently launched Jones Act ship ISA BELLA at the General Dynamics NASSCO shipbuilding yard in San Diego. NASSCO has a long term relation with DSME to design and provide other services for the commercial ships they construct in San Diego for the Jones Act market.

It is interesting that the Jones Act industry criticizes the South Korean shipyards as being subsidized and competing unfairly to justify in part continuation of the domestic ship build requirement of Jones Act cabotage, and then in turn depend on alliances with subsidized South Korean shipbuilders for a suite of services critical to their ability to construct modern ships.


Korea Development Bank and Export-Import Bank of Korea will bail out ailing Daewoo Shipbuilding and Marine Engineering with W4.2 trillion (US$1=W1,134).

Daewoo posted a total loss of W5.3 trillion in marine structures and floating plants.

A government official on Tuesday said KDB, the largest shareholder in the firm, has decided to increase Daewoo's capital by issuing new stocks worth W1 trillion.

KDB and Ex-Im Bank each will provide half of the remaining W3.2 trillion. KDB will also convert W1 trillion from Daewoo's debt into equity, raising the actual bailout to W5.2 trillion.

The cash injection will be given step by step until the first half of next year.

Daewoo on the same day announced an operating loss of W1.2 trillion in the third quarter. During the second quarter it disclosed an accumulated deficit of W3.2 trillion that had not been reflected in the financial statements before.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii


Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii