The South Korean Daewoo Shipbuilding & Marine Engineering (DSME) is selling its local subsidiary yard Samwoo Heavy Industry. The shipbuilder is struggling from indebtedness and under the advice of its finance auditor KPMG Samjeong is trying to improve liquidity and raise cash flows by selling assets. The offers for Samwoo Heavy Industry are expected to be received during a formal auction in mid-June, while the target for completion of the deal is set for July. The finance adviser of DSME already sent teaser letters to domestic and overseas potential investors at the end of April and is planning to receive letters of intent from potential bidders by the end of May.
Daewoo Shipbuilding & Marine Engineering is seeking for buyers of its both domestic and overseas yards, following the rapidly growing debt and low liquidity following the crisis of the shipping market.
Samwoo Heavy Industry, which is located in Gwangyang, is manufacturing ship and offshore equipment.The company generates 95% of sales from trade with DSME. The subsidiary yard already began to prepare for the sale in late 2015 by reducing its asset, as it sold part of production facilities to a rival firm and a stake in its metal-making subsidiary to DSME.