Daewoo E&C Plunges in the 22% Range After Czech Nuclear Plant Construction Contract Talks Collapse [Stock NOW]

[Financial News] Daewoo Engineering & Construction is plunging after news that negotiations over the construction contract for the Dukovany nuclear power plant project in the Czech Republic have collapsed.
As of 10:14 a.m. on the 29th, Daewoo Engineering & Construction was trading at 11,080 won, down 3,190 won (22.35%) from the previous trading day. The share price opened at 14,180 won before falling as low as 10,930 won during the session.
Korea Hydro & Nuclear Power (KHNP) said it would end negotiations on the construction contract for the Dukovany nuclear power plant project, which it had been pursuing with the Daewoo Engineering & Construction–Doosan Enerbility consortium. The decision followed the two sides’ failure to bridge their differences over key contract terms.
KHNP and the consortium held working-level talks, convened a differences-mediation committee, and conducted management-level negotiations, among other efforts, but failed to reach a final agreement. KHNP plans to begin the process of terminating the joint cooperation agreement signed with the existing consortium and prepare a tender to select a new construction contractor.
The Dukovany nuclear power project involves building two Korean-designed APR1000 reactors, each with a capacity in the 1,000-MW range, in the Dukovany region of the Czech Republic. The total project cost is approximately 407 billion korunas (about 25 trillion won). After signing the main contract with the Czech project owner in June last year, KHNP has been pursuing contracts in various fields with participating Team Korea companies.
However, the negotiations that broke down were specifically those over the construction contract with the Daewoo Engineering & Construction–Doosan Enerbility consortium. KEPCO E&C’s comprehensive design services contract and Doosan Enerbility’s supply contracts for reactor equipment and turbine-generator equipment have already been signed. KHNP plans to carry out essential work itself until a new construction contractor is selected, minimizing any disruption to the project.
On the 27th, Daewoo Engineering & Construction reported that its consolidated operating profit for the third quarter of this year rose 223.7% year-on-year to 183.2 billion won. Despite the strong results, the collapse of the construction contract negotiations for the Czech nuclear power plant is thought to have sharply dampened investor sentiment.

[email protected] Lee Jeong-hwa Reporter