HANWHA’S INVESTMENT IN DSME

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Daewoo Shipbuilding and Marine Engineering, one of the world's top shipbuilders, is soon to be acquired by a new owner after more than two decades. Hanwha says it's willing to invest two trillion won in the shipbuilder, but there are many hurdles ahead.

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From an unscheduled meeting of the ministers of industry and economy to a press conference led by the chair of Korea Development Bank. Things have been hectic and recently urgent around the sale of Daewoo Shipbuilding and Marine Engineering. KDB said the shipbuilder has signed a conditional investment agreement with Hanwha Group.

[Soundbite] Kang Seog-hoon(Chair, Korea Development Bank) : "The fundamental solution to the shipbuilder's management structure and ways to bolster its competitiveness in the mid to long-term is finding a competent owner in the private sector."

Under the deal, Hanwha will buy up 49.3-percent stake and management rights through participation in DSME's two-trillion-won rights offering. However, other interested investors offering better terms for the deal are also invited to take part. If no other investor offers better conditions for the acquisition, Hanwha will take over the debt-ridden shipbuilder. Daewoo Shipbuilding and Marine Engineering has been managed by the KDB for 21 years. The acquisition is expected to make it one of the nation's top-three shipbuilding giants along with Korea Shipbuilding and Offshore Engineering and Samsung Heavy Industries.

[Soundbite] Kang Seog-hoon(Chair, Korea Development Bank) : "The shipbuilder’s corporate value has plunged without an end in sight. We want to minimize losses incurred by the public."

Meanwhile, controversy could arise over the low price of the deal, which is just a third of the price brought up in 2008, when Hanwha made its first attempt to take over DSME. The shipbuilder's labor union may also express opposition to the acquisition by Hanwha, which has no previous experience in shipbuilding.

[Soundbite] Jang Seok-won(Korean Metal Workers’ Union) : "They should give us a clear reason why DSME should be acquired by Hanwha. So far nothing has been said about it."

The final decision on who will run DSME is to be made at the end of 2022. Hanwha says DSME's world-leading shipbuilding technology and Hanwha's competitiveness in the national defense sector will generate synergy.