Sungdong Shipbuilding & Marine Engineering applied on the 22nd to the Changwon District Court for corporate rehabilitation process (receivership).
According to sources in the shipbuilding industry, on the 8th, the government held a ministerial meeting on industrial competitiveness under the guidance of both Deputy Prime Minister and Minister of Strategy and Finance, Kim Dong-yeon, to finalize and release plans for handling the medium-sized shipyard as well as court receivership for Sungdong Shipbuilding & Marine Engineering.
The government’s decision is based on the fact that Sungdong Shipbuilding & Marine Engineering’s two-point financial soundness evaluation showed that the value of survival is significantly lower than the liquidation value.
According to the financial soundness evaluation, Sungdong Shipbuilding & Marine Engineering has received about 4 trillion won from creditors, but its debt amounts to upwards of 3.1 trillion won.
In addition, their current capital is in a state of capital shortage, with cash reserves of only 100 billion won and only 5 order backlogs.
Sungdong Shipbuilding & Marine Engineering will either be liquidated or revived according to the court’s decision.
In case of liquidation, it is expected that about 1,400 employees will lose their jobs, which would have a significant impact on the local economy. If the opposite is the case, the court will lead efforts to revive the company.
A Sungdong Shipbuilding & Marine Engineering official said, “We don’t think it will be the end for us just with the court receivership since we do not know what the court will decide in the end.”
