[Courtesy of Doosan Heavy Industries & Construction]
SEOUL -- Doosan Heavy Industries & Construction, a key contractor in South Korea's energy industry, will receive new loans from a state lender to repay $500 million in foreign currency bonds due on April 27. The Export-Import Bank of Korea will determine the amount of additional money needed for Doosan Heavy after due diligence is completed.
Doosan Heavy will receive 586.8 billion won ($475 million) at the maturity of one year from Eximbank which has guaranteed Doosan Heavy's foreign currency bonds. Due to the conversion of loans, the outstanding amount of loans extended by Eximbank to Doosan Heavy rose to 1.4 trillion won.
The company has already received one trillion won from Eximbank and the Korea Development Bank (KDB), which described a special bailout for Doosan Heavy as an inevitable choice to protect a key industry hit by a global coronavirus pandemic.
Eximbank's data showed that Doosan Heavy is saddled with 4.2 trillion won in loans due this year, including 1.25 trillion won in corporate bonds, 1.1 trillion won in state-run bank loans, 780 billion won in commercial bank loans, 360 billion won in foreign bank loans and 700 billion won in corporate bills and short-term bonds.
Eximbank will determine the amount of additional money needed for Doosan Heavy after due diligence is completed. The company has disposed of non-core assets due to an uncertain business outlook caused by President Moon Jae-in's policy of phasing out power plants using fossil fuel.
Doosan Heavy has made self-rescue efforts to improve its financial structure, including voluntary retirement, but it has failed to ease financial woes because of COVID-19. The company has promised to pay back its debt through restructuring.
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