In an absence of signs of immediate recovery in the global shipbuilding industry, South Korea’s financially-troubled Daewoo Shipbuilding & Marine Engineering Co. (DSME) unveiled an additional self-rescue plan on Wednesday to raise 700 billion won ($609 million) in funds to stay afloat. The plan comes after the debt-ridden shipbuilder introduced self-rehabilitation measures worth 5.3 trillion in June that include reducing wages and downsizing facilities.

The latest plan was announced by Jung Sung-leep, chief executive and president of DSME, in a press conference at the shipbuilder’s headquarters in Seoul. According to Jung, DSME will secure 700 billion won including 300 billion won through sale of company housing for its employees in Geoje, South Gyeongsang. With the additional measures, the total self-rehabilitation amount DSME has vowed to provide reaches 6 trillion won, and the company aims to complete implementation of all funds by 2018.

With regard to the government’s recent advice that DSME should minimize its offshore drilling business to enhance overall competitiveness, Jung said that the company will focus to build fixed platforms that guarantee profit.

The chief executive remained resolute that his company will overcome current difficulties, saying “survival” is of the utmost importance to DSME and pledging to raise 7 trillion won in annual sales with 4 trillion won from its shipbuilding business, 2 trillion won from offshore drilling and 1 trillion won from special shipbuilding by 2018 through bold business reform. Jung also vowed to commit for greater transparency at the company that has been under prosecutors’ probe on its accounting fraud scheme that enabled it to hide its deficits for several years.

Jung, meanwhile, expressed discomfort over recent media reports based on a review by global consulting company McKinsey that DSME is least likely to survive among the country’s top three shipbuilders as it has the weakest financial structure. The CEO warned that closing down DSME would rack up more social costs than did the collapse of Hanjin Shipping Co., and it would be reasonable to normalize a company if it can be done with 4 trillion won instead of 50 trillion won. Jung also pointed out that the McKinsey review did not reflect DSME’s self-rescue plans.

At the press conference, Jung expressed optimism that the delayed delivery of two drill ships to Angolan state oil firm Sonangol EP is expected to be resolved soon and that it is now an issue of “timing.” The delayed delivery of the drill ships has added more woes to the shipbuilder already grappling with ballooning debts. Jung emphasized that the drill ship orders have been placed by an Angolan state oil company and that there will be no ultimate risk in the delivery.

By Moon Ji-woong

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