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HHI interested in buiying stake in Daewoo Shipbuilding

Monday, 04 Feb 2019

South Korea’s Hyundai Heavy Industries (HHI), the world’s biggest shipbuilder, announced a plan to take over Korea’s Daewoo Shipbuilding & Marine Engineering which would create a yard group holding over 20% of the global shipbuilding market.

The state-backed Korea Development Bank (KDB) said it has signed a memorandum of understanding to sell the KDB’s 55.7% shareholding in Daewoo Shipbuilding to Hyundai Heavy. The combination of the two giant shipbuilders would ease competition and excess capacity, which have depressed new ship prices, KDB Chairman Mr Lee Dong-gull said. Daewoo will also receive liquidity support of US$2.25 billion from KDB and Hyundai, Hyundai said in a statement. KDB also said it would approach Korean yard Samsung Heavy to ask if it has interest in taking over Daewoo. A Samsung Heavy spokesman said it has received a proposal from KDB and that it needs to review the matter. Hyundai Heavy’s workers’ union said it will delay a vote on a wage deal in protest at the Daewoo purchase which it says could threaten job security. The union said it would be “angered” if the shipbuilder ploughed money into buying another big firm having released workers after reporting losses and shrinking orders. KDB’s Lee ruled out any job cuts after the combination.

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