Hyundai Heavy Said To Get Bank's Approval To Raise $2.2B

(Bloomberg) -- Hyundai Heavy Industries Co., the world’s biggest shipbuilder, received an initial approval from its creditor  KEB Hana Bank to raise 2.6 trillion won ($2.2 billion) selling assets, according to a person familiar with the plan.

The shipbuilder plans to sell stakes in other companies and real estate projects, the person said, asking not to be identified as the information isn’t public. Hyundai Heavy will also sell some of its businesses, including solar energy, the person said.

An Young Geun, a spokesman for the creditor, confirmed the approval without providing details. Hyundai Heavy declined to comment.

Hyundai Heavy is the first of the so-called Big Three shipyards in South Korea to get an approval for its restructuring plans after reporting losses last year amid delays in deliveries and a drop in the number of orders. Oil prices that have more than halved in the last two years have crushed demand for new vessels and offshore drilling products.

Ulsan, South Korea-based Hyundai Heavy has reduced the number of its executives, carried out an early retirement program and cut pay after posting a loss of 1.35 trillion won last year.

Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co., part of the Big Three, are also seeking approval from their main creditor banks on their restructuring plans.

The government said in April that creditor banks of the three shipyards will review the plans every quarter and said merger among them was inappropriate.

--With assistance from Jung Park. To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Sam Nagarajan