S. Korea Shipbuilders’ Debts Pile Up to $84b
World Economy

S. Korea Shipbuilders’ Debts Pile Up to $84b

The combined debt held by South Korea’s top nine shipbuilders exceeded 100 trillion won ($84.7 billion) last year amid the prolonged industrywide slump around the globe, industry data showed Sunday.
According to the data compiled by market researcher Chaebul.com, the combined debt held by the shipbuilders on a consolidated basis came to 102.6 trillion won, casting clouds over the recovery of one of the main growth engines of Asia’s fourth-largest economy, Yonhap reported.
The figure marks a significant rise from 90.5 trillion won posted in 2011.
Daewoo Shipbuilding & Marine Engineering Co. saw its debt surge 53.1% over the cited period to 18.6 trillion won, marking the sharpest growth among the major players.
The country’s top three shipyards also suffered a combined operating loss of 8.5 trillion won last year, due largely to increased costs stemming from a delay in the construction of offshore facilities and a worldwide dearth in demand. Some 5.5 trillion won of the losses came from DSME.
“As the government, business leaders and creditors missed the appropriate timing to roll out restructuring, the poor condition of the shipbuilding industry worsened, making the burden on the country heavier,” said Jung Sun-sup, who heads Chaebul.com.
Kim Sang-jo, an economics professor at Hansung University, echoed the view, adding that the government and the politicians must thoroughly examine key issues facing the local shipbuilding industry and come up with appropriate ways to handle the situation.

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