The credit rating of South Korea’s leading nuclear power plant equipment maker Doosan Heavy Industries & Construction Co. was slashed by one notch to BBB+ on concerns that the government-led nuclear phase-out policy would weigh on the company’s sales, further squeezing its liquidity with high debts.

Seoul-based credit rating firms of Korea Investors Service and NICE Investors Service on Thursday said in a separate press release that they have lowered Doosan Heavy’s rating from A- with a negative outlook to BBB+ with a positive outlook to reflect snowballing debts and bleak outlook following the decision by the Korean government under liberal President Moon Jae-in to wean the country off from nuclear energy and fossil fuel.

Under the country’s latest nuclear-free plan, all new nuclear power plant building projects are called off except Shin Kori-5 and Shin Kori-6 reactors that have been already under construction. Despite the resumption of the construction of the Shin Kori reactors, the business prospect of Doosan Heavy that has been the leader in the local nuclear market remains gloomy, analysts at the rating agencies said, citing the country’s green energy policy. According to sources, the 8th basic electricity supply and demand plan recently submitted to the National Assembly proposes reduction in power output from nuclear and coal-fired plants by 2030, a move that would further cut sales of Doosan Heavy in the local market.

A further fall in its nuclear and coal-fired plant equipment sales would aggravate the liquidity problem of Doosan Heavy whose debt ratio already reached 178 percent as of end of September, warned the analysts. The company has to repay 360 billion won ($336.9 million) worth debts in the first half of next year, but it has no enough money after it has injected capital into its sibling companies Doosan Cuvex and Doosan Engineering & Construction that have been also struggling with cash shortage.

To reduce debt, Doosan Heavy is seeking to sell its stakes in Doosan Engine and improve its balance sheet by cutting fixed costs and dividend payment. The company reportedly hopes to sell its Doosan Engine stakes at 200 to 300 billion won.

Shares of Doosan Heavy on Thursday ended 0.65 percent down at 15,350 won from the previous session.

By Chung Hee-young and Lee Ha-yeon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]