Debt laden C& Heavy likely to start workout program

Seoul: C& Heavy Industries, a flagship unit of the cash-strapped C& Group, is expected to ask Woori Bank and other creditors to place it under a workout program this week in a bid to stay afloat amid the deepening credit squeeze and a global economic downturn, the Korea Times reported.

If creditors accept its request, the shipbuilder will undergo drastic restructuring in return for the extension of loan maturities and an injection of fresh capital. The main creditor, Woori Bank, recently demanded that C& Heavy Industries submit a self-rescue plan, after the company had failed to pay back maturing loans for the past two months. ‘We received the self-restructuring scheme from the shipbuilder. We are currently studying the feasibility of the plan. If the company files for a workout program, we will hold a meeting with other creditors and decide what to do,' a Woori Bank official said. Industry experts expect C& Heavy Industries to apply for the restructuring program Wednesday, when C& Group holds a bidding for its ailing construction arm, Woobang Engineering, in an attempt to sell the builder at a higher price. If 75 percent of creditors approve the plan, the shipbuilder will have its debts rescheduled or receive new loans. But in return, the company will be required to sell assets and take a range of self-rescue measures, along with a management reshuffle. It is estimated that commercial banks and savings banks have extended a total of 1.3 trillion won to 41 subsidiaries of C& Group.
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