UPDATE 3-S.Korea creates $9.5 bln fund for banks exposed to shipyard troubles | Reuters

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    The World’s Top Three Shipyards Want to Raise $7.3 Billion in Revamp - Bloomberg
    ▻http://www.bloomberg.com/news/articles/2016-06-08/world-s-top-three-shipyards-seek-to-raise-7-3-billion-in-revamp

    The world’s three biggest shipyards, battered by the deepest industry slump in at least two decades, are getting a helping hand — from the state.

    South Korea’s government is at the forefront of efforts to revive the shipbuilders, which employ almost 62,000 people, or 1.4 percent of the nation’s manufacturing sector workforce. After pledging active steps in April to help the sector weather the slowdown, policy makers in Seoul on Wednesday announced an 11 trillion-won ($9.5 billion) fund to help lenders absorb losses.

    For their part, Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. unveiled plans to raise a combined 8.41 trillion won selling assets as part of the restructuring. The companies have struggled with losses and mounting debt after a slide in crude oil prices, which more than halved in the past two years, prompted customers to slash investments, and cancel or postpone projects.

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      UPDATE 3-S.Korea creates $9.5 bln fund for banks exposed to shipyard troubles | Reuters
      ▻http://www.reuters.com/article/southkorea-economy-restructuring-update-idUSL4N1900UC

      South Korea’s government and central bank will create an 11 trillion won ($9.50 billion) fund to support two state-run banks most exposed to the country’s struggling shipping and shipbuilding firms.

      “Our key industries like shipping and shipbuilding are being aggressively caught up by countries like China and management conditions have worsened due to weak global trade,” Finance Minister Yoo Il-ho said in a speech announcing the corporate restructuring plans on Wednesday.

      South Korea expects a 20 percent drop in major shipbuilders’ capacity and a 30 percent drop in their workforce by 2018 from 2015, after the restructuring process.

      The two state-run banks to be capitalised are Korea Development Bank (KDB) and the Export-Import Bank of Korea (KEXIM).

      Following the announcement, the International Monetary Fund said it supported Korea’s corporate reforms and urged the government to implement additional fiscal stimulus and the central bank to ease monetary policy.

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      South Korean Prosecutors Raid Daewoo Shipbuilding Offices - Bloomberg
      ▻http://www.bloomberg.com/news/articles/2016-06-08/south-korean-prosecutors-raid-daewoo-shipbuilding-offices

      South Korea’s prosecutors raided the offices of Daewoo Shipbuilding & Marine Engineering Co. as the world’s second-largest shipbuilder tries to raise funds through asset sales to reduce debt.

      The raid comes after an audit committee of Daewoo Shipbuilding requested an investigation into two former chief executive officers for alleged mismanagement of the company, the Geojae, South Korea-based shipyard said in an e-mailed response to a Bloomberg News query.

      Daewoo Shipbuilding posted its biggest loss last year after write-offs for delayed projects. The company is among shipyards restructuring to raise funds after deliveries of offshore drilling and production units were pushed back, as oil prices that have fallen by half in the last two years crushed demand.

      Prosecutors raided the company’s offices in Seoul and Geojae, Daewoo Shipbuilding said. Computer hard drives, account books and documents were confiscated by the officials, Yonhap News Agency reported, citing the Supreme Prosecutors’ Office. A person who picked up a call to the media office of the Seoul Central District Prosecutors’ Office said she couldn’t comment on any investigation by the office.

      Daewoo Shipbuilding posted a net loss, excluding minority interest, of 3.19 trillion won ($2.8 billion) in 2015. The company restated its earnings from 2013 on the advice of its auditors to better reflect the write-offs in its financials.

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