South Korea’s Samsung Heavy Industries (SHI) has unveiled details of its self-restructuring plan which reveals that the financially troubled shipbuilder plans to make the necessary workforce cuts through an early retirement scheme and to require from its executives to return part of their salaries, The Korea Herald reports.
The restructuring plan, provisionally approved by SHI’s creditors, calls for 1,500 early retirements by the end of the year. The plan also requires the executives to return around 30 percent of their salaries as of July.
Last month, the company submitted the self-rescue plan to its creditors which, apart from job cuts, proposed the sale of KRW 200 billion (USD 170.7 million) worth of real estate assets, and the sale of the company’s stake in Doosan Engine.
The proposed self-rehabilitation scheme is worth KRW 1.5 trillion (USD 1.27 billion).
SHI plans to suspend part of its production facilities including floating docks in order to remain liquid due to a lack of orders .
Samsung Heavy also proposed a sale of its shares, triggering speculations that the company’s affiliates including Samsung Electronics – a 17.62 percent stakeholder in the shipyard – are likely to join forces in order to save the struggling shipyard.
Another South Korean shipyard, Hyundai Heavy Industries (HHI), recently received an approval from its creditors to carry out its self-rescue plan . HHI said it intends to implement approximately USD 3.02 billion-worth management improvement plan by 2018.
Additionally, Daewoo Shipbuilding & Marine Engineering (DSME) received clearance from its respective creditors earlier this month to go ahead with its USD 4.47 billion self-restructuring scheme.