Doosan Heavy Industries "Expanding New Business Order Share to 50% by 2023"

Measures to Repay Loans Prepared at the General Meeting of Shareholders

[Asia Economy Reporter Ki-min Lee] Doosan Heavy Industries & Construction, which has secured emergency operating funds of 1 trillion KRW from the state-run Korea Development Bank and the Export-Import Bank of Korea, announced its management goal to expand the proportion of new business orders to around 50% by 2023, alongside preparing multifaceted self-help measures for loan repayment.

On the 30th, Doosan Heavy Industries & Construction held its 57th regular general shareholders' meeting at the Doosan Building in Gangnam-gu, Seoul, where it addressed agenda items including approval of financial statements and consolidated financial statements, partial amendments to the articles of incorporation, and reappointment of directors.

Choi Hyung-hee, Vice President and CEO of Doosan Heavy Industries & Construction, who chaired the shareholders' meeting, presented three key tasks to overcome the management situation in his opening remarks, stating, "We have established a mid- to long-term order portfolio that includes expanding the proportion of new business orders to around 50% by 2023."

Vice President Choi explained, "To this end, we are actively promoting new businesses such as gas turbines, renewables, services, hydrogen, and 3D printing. Currently, gas turbines are expanding not only product development but also service businesses targeting domestic power companies, and wind power has laid the groundwork for order expansion by obtaining international certification for the 5.5 MW model."

Before fully launching new businesses, Doosan Heavy Industries & Construction plans to secure maximum sales in existing businesses to maintain a stable profit structure. Vice President Choi emphasized, "We will actively explore various approaches, including national-level cooperation and re-sales utilizing core technologies, not only to defend existing key markets but also to access markets that have been difficult to approach."

Additionally, the company intends to accelerate the commercialization of digital transformation and use it to explore domestic and overseas market entry, expanding application areas to wind and hydropower.

At the shareholders' meeting, shareholders including about 10 union members raised numerous questions regarding the 1 trillion KRW emergency loan received from the Korea Development Bank and the Export-Import Bank on the 27th and the normalization of management.

When Lee Sung-bae, chairman of the Doosan Heavy Industries & Construction labor union branch, asked, "How will you normalize management after receiving 1 trillion KRW?" Vice President Choi replied, "The 1 trillion KRW loan functions like a bank overdraft, so we are currently conducting external consulting on how to use these funds going forward, and we will regularly consult with creditors to ensure the necessary funds are used appropriately."

Vice President Choi also reported, "We have completed a comprehensive stock swap to speed up decision-making and improve management efficiency regarding Doosan Construction, and we have received a capital injection of 230 billion KRW for Doosan Mecatec shares." Regarding whether loan repayment will be covered by business activities or employee restructuring, he said, "We must do our best in business, reduce our size, and cut fixed costs. All these must be achieved for the company to normalize."

At the shareholders' meeting, partial amendments to the articles of incorporation to resolve financial difficulties were approved. The agenda to increase the total number of shares fivefold from 400 million to 2 billion shares with a fixed par value of 5,000 KRW per share, and to expand the issuance limits of convertible bonds (CB) and bonds with warrants (BW) from under 500 billion KRW to around 2 trillion KRW each, were passed. Additionally, Park Ji-won, Chairman of Doosan Heavy Industries & Construction, was reappointed as an inside director, and Nam Ik-hyun, a professor of business administration at Seoul National University, was reappointed as an outside director. However, the proposal to appoint Professor Nam as an audit committee member was rejected due to insufficient quorum.