DSME union steps back from action over sale

DSME's union said it should be consulted at each stage of the sale.

THE labour union of Daewoo Shipbuilding and Marine Engineering has called off action preventing shareholder Korea Development Bank from carrying out a due diligence exercise.

While the union has said it will allow the due diligence to go ahead on the world’s third largest shipyard, the union has indicated that further disruption can be expected if demands are not met.

Creditors, including KDB and Korea Asset Management Co, are preparing to sell a 50.4% stake in DSME in the fourth quarter of this year.

In 2006, the union had asked to be included in any bidding for the stake, insisting it was interested in at least 17% of the company - a plea that has gone unheeded.

On Wednesday, a union official said it wanted the 50.4% stake to be sold in blocks, indicating the union was still hoping to participate in the sale. He said the union should be consulted at each stage of the sale.

The creditors’ stake sale has been delayed one more than one occasion by union activities and the dropping of Goldman Sachs as the sale manager earlier this year.

Leading contenders in the bid for DSME include Posco, Doosan Group, GS Group and Hanwha Group. In May the union raised objections to participation by Hanwha Group claiming that management of the group was often unethical.