Sekwang Heavy Industries denies bankruptcy filing
SOUTH Korean shipbuilder Sekwang Heavy Industries has denied market suggestions that it has filed for bankruptcy and has been thrown a lifeline by its banks. A spokesman from Sekwang said rumours that the yard had filed for bankruptcy were incorrect. However, he did admit it was facing financial difficulties that it was working on with its banks. “We are managing our financial issues,” the spokesman said. “We have some problems with cashflow but we are discussing these with our banks.” Construction activities are continuing as normal at the shipyard. In a credit evaluation of South Korea’s shipbuilders conducted by the Korean Federation of Banks in January, Sekwang received a ‘B’ rating. An ‘A’ rating was the highest possible and a ‘D’ rating the lowest. Only yards with a ‘D’ rating were considered to be in an unsalvageable position. An investment analyst said that Sekwang had avoided bankruptcy for now and Korea Development Bank was working with its creditors to extend repayment deadlines by a further three months from early June. He expected a bailout for the yard to be agreed given the size of its orderbook, estimated at Won4.2trn ($3.2bn). According to Clarksons there are a total of 63 vessels on order at Sekwang totalling 691,807 dwt.
Sekwang is an established mid-sized South Korean shipbuilder, previously known as INP Heavy Industries. The yard specialises in building chemical tankers, small liquefied petroleum gas and ethylene carriers, and anchor handling tug supply vessels. Several South Korean shipbuilders have gone to the wall this year, including Jinse Shipbuilding, C& Heavy Industries and YS Heavy Industries. Both Nokbong Shipbuilding and Daehan Shipbuilding were ordered to restructure following the credit evaluations, however the former had financial support withdrawn in March.
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