South Korea’s troubled Samsung Heavy Industries Co. is mulling outsourcing shipbuilding and running operation and maintenance (O&M) business to save cost and seek out new revenue base to weather the prolonged slump in the shipbuilding industry.

At a board meeting on Friday, the shipbuilder endorsed the already-announced plan to raise capital by 1.1 trillion won ($984.7million) by issuing 159,120,000 in new shares priced at 6,920 won apiece with a 20 percent discount. Actual share price will be determined by Nov. 2. The shares would be first sold to allocated Samsung Group companies and the remaining to retail investors.

The company which has not been able to secure new orders throughout the year has sought debt relief and needs immediate cash to run business. As a part of the self-rescue plan, shareholders of the shipbuilder approved to up the share issues to 500 million from 300 million to allow the right offering.

The company claims it would be able to secure up to 1.6 trillion won through such efforts.

Chief executive Park Dae-young, who earlier warned employers of streamlining, said the management was looking into other options to save cost and raise new revenue source apart from costly and risky shipbuilding.

The company could offer after-sale maintenance services for its customers on the vessels it built. Most of the O&M work goes to Singaporean companies. But it will help both the customers and the company if the maker helps to run the ships, he told shareholders.

He also indicated that some of the less lucrative jobs could be outsourced to cheaper labor in China, Indonesia, or smaller shipyards in Korea.

“There is no need to build all the ships at (our) Geoje shipyard,” he said.

He made it clear the fund raised from the new stock issue would be entirely spent to run business. Unnecessary assets will be sold as planned.

He brushed aside the possibility for a merger with Samsung Engineering in the near future.

Samsung Heavy shares closed at 9,860 won Friday, down 0.3 percent from the previous session.

By Kim Jung-hwan

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