Following recent news that Samsung Heavy Industries were preparing to sell US$1 billion in stocks due to an industry slump, more issues have arisen as it has now been announced that a planned $776 Billion substructure has been cancelled. The substructure unit was set be used for liquefied natural gas (LNG), floating production, storage and offloading (FPSO).
The South Korean economy is heavily reliant on Shipping and Shipbuilding, being home to some of the largest names in the industry including Hyundai, Samsung and the recently doomed Hanjin Shipping and this cancellation is the latest in an ongoing industry decline that has been transpiring since the 2008 crash. This termination of the FPSO order casts further doubt on a South Korean industry where Samsung Heavy, Hyundai and Daewoo reported combined losses of $7.5 Billion last year alone.
In the regulatory filing, the South Korean shipbuilder said the order cancellation was due to the unspecified European firm and their failure to issue a work order by the deadline that both parties had agreed upon.
At this time, a Samsung Heavy spokesperson could not be immediately reached for comment.