Sonagol Deepens DSME's Woes
Concerns were growing again over liquidity woes of Soth Korea's largest shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME), as the Angolan oil major Sonangol EP is likely to delay the takeover of its drill ships once again.
According to The Korea Herald, DSME was planning to deliver the two drill ships to Angola’s state-run oil company Sonangol by this month to receive the remaining contract fee of $1 billion.
The South Korean shipbuilder has completed building two drill ships, set to be delivered in June and July, respectively, but due to financial difficulties, the Angolan company has postponed the delivery. The companies have agreed to push the transaction date to end-September, but the takeover is being postponed again.
Jung Sung-leep, chief executive and president of Daewoo Shipbuilding & Marine Engineering Co. (DSME), has urgently left for Dubai to hold talks with Angolan state oil firm Sonangol EP to plead payment for its orders for two drill ships, says Pulse News.
DSME fighting with prolonged slump and liquidity woes was promised by its Angolan client to accept delivery before September ends, but the likelihood was dimmed due to delayed approval for the financing by the latter’s overseas creditors.
Officials from the shipbuilders’ state lenders Korea Development Bank and Korea Trade Insurance Corporation have accompanied Jung. The two Korean state lenders have already offered equity investment to help facilitate the delivery.
DSME has decided to receive 80 percent of the remaining payment in cash and the rest in stocks of a special purpose vehicle that would manage the two drill ships. Sonangol is still having difficulties securing funds.
