Daewoo Shipbuilding plans to restructure

Korean builder posted $2.61bn loss, which it blamed on offshore project delays

Daewoo will sell the company headquarters in Seoul.
Daewoo will sell the company headquarters in Seoul.

South Korea's Daewoo Shipbuilding & Marine Engineering Co. said on Monday it would restructure after a $2.61bn loss in the second quarter of 2015.

Construction delays on offshore projects such as oil and ags rigs are to blame for its financial performance, the company said, adding that it would sell non-core assets and shut down or exit non-essential units as part of the restructuring.

It will also sell the company headquarters in Seoul and wind down or sell units that are unrelated to its core shipbuilding or offshore plant businesses such as wind power subsidiary DeWind Co. and local golf course operator FLC Ltd., Reuters reports.

Daewoo Shipbuilding & Marine Engineering was recently awarded part of a $2.6bn investment by Maersk Drilling to build and deliver a jack-up rig. The rig is currently under construction in Daewoo’s shipyard in South Korea and is due for delivery in 2016.

The new build will represent the fourth in a series of ultra-harsh environment jack-ups at Maersk’s drilling fleet, with the latest addition delivered in 2014 and hailed “the world’s largest”.

In February last year, the South Korean shipbuilder signed a letter of intent to build eight very large gas carriers (VLGC) with shipping outfit China Peace.

At the end of 2014 Daewoo Shipbuilding and Marine Engineering awarded Italian contractor Saipem a $1bn pipeline construction contract in the Caspian region.

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