Creditors temporarily OK debt rescheduling plan for C&Heavy

(ATTN: UPDATES throughout with creditors temporarily approving debt rescheduling
plan, quote, details in paras 1-6, stock reaction in final para; AMENDS headline)
SEOUL, Dec. 3 (Yonhap) -- Creditors of C&Heavy Industries Co., a shipbuilding
affiliate of South Korea's C&Group, said Wednesday they temporarily approved a
plan to reschedule debts owed by the shipbuilder.
The creditors, led by Woori Bank, said they would allow C&Heavy to defer its debt
repayment and provide fresh loans by Feb. 13 next year and conduct a due
diligence to "normalize operations" of the heavily-indebted shipbuilder.
However, the creditors didn't specify how the debts would be reorganized.
Under the period of due diligence, creditors will consider whether to rescue
C&Heavy, a person close to the creditors said.
Unless other creditors agree on the plan to normalize operations of C&Heavy
during the due-diligence period, the shipbuilder will face liquidation or be put
up for sale, the person said.
"If new loans are offered, creditors will have to find who should take the
responsibility of management failure," the person said, adding "If creditors
burdened, the plan will return to the starting point."
The move underscores the financial difficulties that smaller shipbuilders in
South Korea face in the shipbuilding industry, as they find it increasingly
difficult to get new loans amid the global credit crisis.
C&Heavy had liabilities of 550.3 billion won (US$38.3 million) owed by 21
creditors.
After the news that creditors temporarily approved the debt-rescheduling plan,
shares of C&Heavy jumped 14.65 percent to 900 won at one point in afternoon
trading in Seoul.
(END)