IN a surprising turn of events, the Korea Development Bank has decided to leave the door open for further talks with the National Pension Service regarding the terms of Daewoo Shipbuilding & Marine Engineering's financial aid package.

KDB chairman Lee Dong-geol said the bank intended to hold negotiations with DSME's largest bondholder to reach an agreement on the terms, a KDB official confirmed to Lloyd's List.

Mr Lee added that he expected the NPS to decide wisely.

An NPS official told Lloyd's List that the pension fund was willing to talk further with KDB on the issue.

The official added that the NPS would make known its stance on the aid package's conditions on Friday.

The NPS' stance will be key in influencing the remaining bondholders' decisions whether to accept the terms of the package, due to its 30% stake in DSME's corporate debt.

KDB had previously rejected all demands made by the NPS to relax the conditions it had to accept in order for DSME to receive a much needed Won2.9trn ($2.6bn) loan from KDB and the Export-Import Bank of Korea.

DSME's bondholders, including the NPS, will have to stomach a Won2.9trn debt to equity swap and three- to five-year grace period on repayment which will likely see most of them take a significant haircut on their investments.

The NPS had asked the policy lender to reduce DSME's equity and foot the bill for about Won440bn of corporate debt due on April 21.

Earlier in the week Hyundai Merchant Marine inked a letter of intent with DSME to order up to 10 very large crude carriers.

The deal was for five VLCC newbuildings, each of 300,000 dwt, and an option for five more ships, DSME and HMM officials told Lloyd's List, with the contract expected to be finalised in July this year.