Daewoo's Financials Come Full Circle

A flood of LNG carrier orders and dollar-denominated payments skewed towards delivery have helped South Korea's Daewoo shipyard, (now known as the world's second largest shipbuilder) still under workout, craft one of the country's most dramatic corporate turnarounds.

"It is like dreaming a really good dream," said a high level official at Daewoo Shipbuilding. "We are now nearly monopolizing the global market for LNG carriers and benefiting from the recent weak won better than our rivals because most payments are made at delivery," he said.

In 2000, Daewoo Shipbuilding & Marine Engineering raked in orders for six LNG carriers - two each from Exmar of Belgium, Tapias of Spain and Bergesen of Norway - out of a total 14 orders placed worldwide.

The shipyard has garnered eight orders, including those at the stage of a letter of intent, so far this year and it expects to win more.

Gas carriers, regarded as high value-added ships, are priced at around $165 million per ship, about twice the price for a very large crude carrier. Included in the list of orders Daewoo received this year are one each from Exmar and North West Shelf of Australia, and two from Petronet of India.

Osprey of Britain, multi-national Royal Dutch/Shell Group, Bergesen of Norway and Exmar have signed letters of intent this year to buy one LNG carrier each.

"We are pretty sure most of the orders to be placed this year are ours," the official said. "Given the exploding demand for gas as a clean energy source, the LNG carrier market will continue booming for the time being with Daewoo benefitting the most."