South Korean shipbuilders seek restructuring amid heavy losses

South Korea's top three shipbuilders are pushing to step up restructuring efforts in the second half of 2015 as they posted record losses earlier this year, industry sources said Sunday.

The outlook came as the shipbuilders -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co., and Samsung Heavy Industries Co. -- posted a combined operating loss of 4.7 trillion won (US$4 billion) in the first half of 2015.

Daewoo Shipbuilding, which posted an operating loss of 3.03 trillion won in the second quarter, down from an operating income of 103 billion won a year earlier, is set to roll out the biggest restructuring efforts among the three, industry watchers said.

The company is anticipated to offload property assets and shares to secure cash, and reduce the number of executives to cut costs. Daewoo Shipbuilding may also seek to sell its affiliates, they added.

"Although we do not have a liquidity problem for now, we will speed up the sales of assets that are not related to mainstay business," an official from Daewoo Shipbuilding said.

Samsung Heavy, which posted an operating loss of 1.5 trillion won in the April-June period, is also set to join the move.

The company said it will also reduce the number of executives and streamline its organizations for faster decision-making processes. The firm added it will also reduce its wind-power generation projects.

Other measures included banning executives from using business class on overseas trips, and making it mandatory to take buses for domestic travel.

Hyundai Heavy, whose second-quarter operating loss reached 171 billion won, narrowing from an operating loss of 192 billion won a year earlier, is also set to roll out similar efforts, industry watchers added.

Currently, Hyundai Heavy employs 28,291 as of the end of July, followed by Samsung Heavy with 12,788 and Daewoo Shipbuilding with 12,602. When taking subcontractors into consideration, the combined number of workers at the three players hovers around 100,000.