South Korean builder Daewoo Shipbuilding & Marine Engineering has decided to exit its wind power business as part of the company’s self-rescue plan.
The shipbuilder has sold two of its subsidiaries, namely DeWind Frisco LLC and KODE Novus I LLC, which hold its loss-making US-based wind energy business DeWind.
According to DSME’s stock exchange release, the subsidiaries were purchased by an undisclosed US private equity fund for about USD 1.5 million. DeWind, which owned the wind farms of the two companies, is expected to be liquidated in the coming months.
The transaction was the latest in DSME’s efforts to get rid of non-core subsidiaries, a process the company is undertaking as part of its KRW 5 trillion restructuring scheme.
DSME acquired DeWind in 2009 for KRW 140 billion won (USD 130.6 million) to expand in the wind power business, however, the company remained in the red since the acquisition.
On January 30, the shipbuilder informed that it assumed KRW 85.7 billion of debts of the two wind farms to Korea Eximbank and Woori Bank, as it was the guarantor.
“According to the agreed debt restructuring, 20% of the debts will be repaid by installments five years later. The rest of the 80% will be converted into equity,” DSME said.
The shipbuilder’s restructuring plan, unveiled in March 2017, sets out three key principles – debt restructuring, financial assistance and bearing the burden of losses by all stakeholders.
During the first nine months of fiscal year 2017, DSME recorded a profit of KRW 1.53 trillion, compared to a loss of KRW 1.24 trillion posted in the same period last year.
World Maritime News Staff