By Kyunghee Park
(Bloomberg) — Daewoo Shipbuilding & Marine Engineering Co. fell to the lowest price in more than 13 years in Seoul trading on concern that its liabilities outpace assets.
Shares of the world’s second-largest shipbuilder dropped 7.3 percent to close at 6,000 won, the lowest level since January 2002. It was the sixth-worst performer on the 1,002- member MSCI Asia Pacific Index.
“There are concerns about the financial health of Daewoo Shipbuilding,” Lee Jae Won, an analyst at Yuanta Securities Korea in Seoul, said by phone Wednesday. “The company’s financials should improve as it’s planning to sell non-core assets to raise funds.”
Daewoo Shipbuilding has more current liabilities than assets, Deloitte Anjin LLC said in the company’s first-half financial statement released Aug. 17. It is carrying out a restructuring plan and is in talks with creditors for new funding to ease concerns with its financial standing, the auditor said.
The shipbuilder canceled a 703.4 billion won ($595 million) order received in 2013 because a U.S. customer failed to make an interim payment, the company said in a regulatory filing Wednesday. It will seek to claim the vessel and compensation for losses.
Daewoo Shipbuilding said Aug. 17 that company executives resigned and it plans to sell non-core subsidiaries and assets, after reporting a second-quarter loss of 2.4 trillion won caused by delays in offshore rig-building orders.
Korea Development Bank, its creditor and biggest shareholder, is re-evaluating the shipbuilder.
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