Norway company agrees to buy undelivered drillship from Daewoo shipyard

By Lim Chang-won Posted : May 2, 2019, 11:32 Updated : May 2, 2019, 11:32

[Courtesy of Daewoo Shipbuilding & Marine Engineering]



SEOUL --Northern Drilling, an offshore drilling company in Norway, has agreed to acquire an undelivered drillship from Daewoo Shipbuilding & Marine Engineering in a deal that could fetch about 410 billion won ($351 million) to the South Korean shipbuilder in the process of being acquired by its domestic rival.

Daewoo Shipbuilding & Marine Engineering (DSME) has retained the drillship as inventory since a contract with its owner was terminated in 2015. On a 2013 order, DSME built the drillship designed in high specifications with two anti-explosion devices, but its owner in America abandoned it, aggravating the shipbuilder's financial problem.

The deal with Northern Drilling came five months after DSME solved a dispute with Angola's state oil company, Sonangol EP, over the delivery of two drillships. Hyundai Heavy Industries (HHI), the world's largest shipbuilder, acquired DSME this year in a merger supported by creditors and government officials.

Through a complicated process of equity conversion or transfer, the shipyards of HHI and DSME will be run under the same roof of a new corporation. The merger followed years of painful restructuring in South Korea's embattled shipbuilding industry, which has suffered from dwindling orders, a prolonged business slump and a strong challenge from Chinese shipyards.

 
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