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The Export-Import Bank of Korea and Korea Development Bank (collectively “creditors”) announced April 27 that they decided to accept Doosan Heavy Industries & Construction’s self-rescue plan submitted by Doosan Group and are considering providing additional financial support to the nation’s largest power equipment maker.
The creditors have been discussing with the group on the validity of the self-rescue plan since April 13 and decided to accept the final proposals the group presented after further investigation.
The self-rescue plan includes the direction of business reorganization to improve the viability of the ailing company and pain-sharing efforts on its stakeholders‘ side, such as affiliates and major shareholders, as well as the company‘s action plans. The plan is found to be in line with the restructuring principles that the creditors have been adhering to.
If the self-rescue plan is smoothly implemented, it is expected to help normalize the business of Doosan Heavy Industries & Construction.
In support of the goal, the creditors decided to consider additional assistance for its repayment of bonds with warrants and other financial obligations maturing in early May.
After a thorough review of the detailed schedule and procedures for each step in the self-rescue plan, the creditors will make a management normalization plan for the company in May, as soon as the results of the on-going due diligence come out.
It is expected that with the restructuring actions to be taken, the company would survive the funding crunch further caused by the Covid 19 crisis and may be able to raise funds based on its own creditworthiness. However, if it goes otherwise, the creditors may have to review another option to provide additional support for the company.