Daewoo Shipbuilding and Marine Engineering Co. (DSME) submitted Friday another self-rescue plan, promising the main creditor Korea Development Bank to come up with another 2 trillion won ($1.68 billion) through sales of lucrative overseas assets and spin-off of profitable business on top of 1.85 trillion won pledged in October last year.

The shipbuilder which had already been bailed out with public funds many times was required of stringent self-rescue efforts to save cost in return for fresh rescue package worth 4.2 trillion won.

Under the new plan, the shipbuilder will attempt to sell shares - possibly controlling stake depending on demand - in its dockyard unit in Shandong, China. DSME Shandong Co., (DSSC) which mainly produces hull blocks raked in 18.8 billion won in net profit on sales of 216 billion won last year. The dock is deemed most lucrative among DSME’s overseas assets. At the same time, the company will reduce dockyard activity at home and sell its shipyard in Romania.

The shipbuilder also is studying to spin off naval and specialty ship business and have it go public to raise proceeds from initial public offering (IPO). The unit specializing in building warships and destroyers has been generating operating profit margins of 6 to 7 percent on average on annual sales of 1 trillion won. Experts believe a company specializing in naval ships would be worth at least 1.2 trillion won and predicted DSME would be able to secure 400 billion won to 500 billion won by offering about 30 percent stake in the unit.

At the same time, the company plans to cut salaries by 20 percent to 30 percent, helping to save 2 trillion won to 3 trillion won in labor cost over the next four to five years.

By Park Yong-beom and Chung Seok-woo

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