Malaysians offer lifeline to C& Heavy

Emerging South Korean shipyard C& Heavy Industries, which was seemingly pushed to the wall by its creditors, may yet have another lease of life.

The shipyard had on Monday signed a memorandum of understanding with an unnamed Malaysian fund that would hopefully lead to its full or partial takeover.

While the financially-ailing shipyard would not name the potential buyer, it did tell local press that it expected the Malaysian company to send representatives to South Korea to conduct condition surveys and enter negotiations on a price for the asset within a matter of weeks.

The management would appear to be going all out to salvage what it can of the operation after creditor banks abandoned the yard as a going concern in a preliminary round of credit evaluations of emerging shipyards and construction companies in January.

Press reports also suggested that C& Heavy was anticipating an upfront payment of Won10bn ($7.5m) from the mystery fund as a guarantee after the two week due-diligence. Part of the reason for a re-emergence of optimism at C& Heavy was the failure of a bankruptcy petition issued by Hutchison Korea Terminal against the shipyard. Gwanju Disrict Court threw out Hutchison’s petition on the basis that the documents submitted did not sufficiently prove that C& Heavy was incapable of paying its debts.