The government of Moon Jae-in's policies for phasing out nuclear power caused significant damage to Doosan Enerbility, and under the administration of Yoon Suk Yeol, a state of emergency has stalled the restructuring of governance. Over the past six months, the Doosan Group has been promoting a plan to separate Doosan Bobcat from Doosan Enerbility and move it under Doosan Robotics, but this was recently derailed as the company’s stock price plummeted. The Doosan Group is expected to consider 'Plan B,' which includes reinitiating governance restructuring and issuing corporate bonds.
The Doosan Group has been pursuing a plan to strengthen the financial structure of Doosan Enerbility to enhance its nuclear power plant business. Doosan Enerbility planned to transfer liabilities totaling 724.3 billion won, including 717.7 billion won of borrowing funds related to Doosan Bobcat and 6.6 billion won of unpaid costs, to Doosan Robotics, while simultaneously securing 481.3 billion won in cash through partitioning. If the governance restructuring had been implemented, net borrowings could have been reduced from the existing 2.8 trillion won to 1.6 trillion won this year. It was also calculated that reducing net borrowings would save about 66 billion won in financial costs annually.
With this restructuring plan derailed, disruptions in Doosan Enerbility's nuclear power enhancement strategy are anticipated. The Doosan Group had planned to respond aggressively to the situation where Moon Jae-in's nuclear phase-out policy was discarded, and global nuclear power construction is increasing. The Doosan Group had also aimed for additional order opportunities as it collaborated with Yoon Suk Yeol’s government on nuclear power sales.
Although the governance restructuring has been derailed, there is still a possibility it could be pursued again. The Doosan Group was reportedly explaining its future growth strategy through investor relations meetings with domestic and foreign institutional investors on the 9th. Doosan Robotics believes that it could achieve results in the smart machine field as long as it secures liquidity, even if it does not immediately merge with Doosan Bobcat.
Doosan Enerbility had planned to create leeway in its borrowing funds through the partitioning of Doosan Bobcat, but with the plan derailed, it is expected to seek alternative funding sources. Currently, Doosan Enerbility pays about 150 billion won annually in interest costs, making cost reduction necessary.
Issuing corporate bonds could also be an alternative. Doosan Enerbility's credit rating is BBB+, but the anticipation of large-scale nuclear power orders has led to relatively low issuance rates. Earlier in September, it raised 150 billion won in 2-year and 3-year corporate bonds at an interest rate in the 4% range, which is lower than the annual interest rate (5.5% to 6.3%) on its borrowing funds (724.3 billion won).
A Doosan Group official said, 'The withdrawal of the company’s partitioning and merger plan was a decision made due to sudden external conditions, and it feels too early to discuss future schedules.'