Daewoo Shipbuilding & Marine Engineering expects a takeover by the Hanwha Group to be completed in the first half of this year.
However, the South Korean shipbuilder’s management said it is still awaiting approval for the transaction from several countries.
The deal has yet to win regulatory approval from South Korea, the European Union, Japan, China, Singapore and Vietnam.
Once it gets approval, DSME will raise KRW 2trn ($1.5bn) from Hanwha’s affiliates at a share price of KRW 19,150, according to management.
South Korean Hanwha would become the largest shareholder of DSME, with 49.33% of the outstanding shares and the power to appoint 50% or more of its board.
The update on the timeline for the acquisition came as DSME reported a loss for 2022 of KRW 1.6trn on higher costs, despite a jump in orders.
Yet the shipyard offered a rosy outlook for this year, saying its performance will most likely take a turn for the better in light of a surge in orders clinched last year and rising ship prices, news agency Yonhap reported.
DSME’s orders exceeded its 2022 target for the second consecutive year, securing orders that could keep it operating for three-and-a-half years.
LNG carriers account for 62 of its order backlog of 113 ships, which could “help boost its top line and profitability”.
Nomura’s Korea industrials analyst Eon Hwang is forecasting that DSME will record revenue of KRW 9.1trn in 2023, up 87.4% year on year.
He said almost 10% of next year’s revenue is likely to be recognised from the resale of an Arc7 ice-breaking LNG carrier that was originally received from Russia and cancelled. DSME is looking for buyers for this carrier.
Additionally, KRW 400bn of revenue will be recognised from the sale of a former John Fredriksen-ordered drillship — the 67,800-gt Lime Rock Partners — to Liquila Ventures, a joint venture between Frederik Mohn’s investment vehicle Perestroika, US private equity firm Lime Rock Partners and drillship owner Transocean.
