The lifeline outlines a debt-for-equity swap for half of the company's debt and a delay in the payment for the dues for three years.

The approval by bondholders was widely expected as the National Pension Service (NPS), the largest investor in Daewoo Shipbuilding bonds, on Monday accepted the plan to keep the troubled shipbuilder afloat.

The NPS, which owns some 30 percent of the shipbuilder's corporate bonds, said it has taken into account that Daewoo Shipbuilding, the state-run Korea Development Bank and the Export-Import Bank of Korea (Eximbank) -- the two main creditors of the shipyard -- all agreed to measures that would better ensure the repayment of corporate bonds that would be rescheduled.

The pension fund had been in drawn-out talks with main creditor banks to discuss ways to keep the shipyard, which has been suffering from a serious liquidity crunch due to a slowdown in global demand, in operation.

In addition to holding a large part of Daewoo's bonds, the NPS owns 45.5 percent of 200 billion won worth of bonds sold by Daewoo Shipbuilding that comes due Friday.

Under the overall rescue plan, half of the shipyard's corporate bonds and commercial papers will be converted into equity with the rest being rolled over to give Daewoo some leeway. KDB and Eximbank will in exchange inject 2.9 trillion won into the company to allow it to stay in business.

Late last month, the KDB-led creditors announced a fresh rescue package worth 6.7 trillion won for Daewoo Shipbuilding, but only if all stakeholders agree to a debt-for-equity swap plan.

The huge assistance measures represent the second round of bailouts for the shipbuilder that has been suffering from severe liquidity problems over heavy losses in its offshore projects.

Daewoo Shipbuilding creditors have repeated that it is inevitable for Daewoo Shipbuilding to be put under a new form of court receivership, called a prepackaged plan, unless bondholders of the shipbuilder agree on a debt-for-equity swap plan.

Policymakers here are increasingly nervous about the possibility of Daewoo Shipbuilding facing the prepackaged plan, which will eliminate 50,000 jobs and trigger a massive cancellation of ships under construction.

Daewoo Shipbuilding is seeking to implement self-rescue measures, worth 5.3 trillion won, through 2018. It has already sold off noncore assets and cut its workforce, through which it has raised or saved 1.8 trillion won.

So far this year, the shipyard has secured $770 million worth of orders, and targets to clinch orders worth as much as $5.5 billion.

Daewoo Shipbuilding expects a total of 10 trillion won in cash to come from the delivery of 48 ships in total by the end of the year. (Yonhap)