[Yonhap News Photo]
STX Offshore & Shipbuilding, an ailing South Korean shipyard, filed for a court-led restructuring scheme Friday after creditors concluded that it has no chance of coming back despite a massive injection of liquidity.
The Seoul Central District Court said it would decide whether to put the troubled shipbuilder under its receivership. Financial regulators did not rule out the possibility of liquidating the shipyard's entire business or shutting down only docks.
STX, once the country's fourth-largest shipbuilder, has been kept afloat with a bailout fund of more than four trillion won (3.37 billion US dollars) from creditors since it was put under a creditor-led restructuring program in April 2013. The debt-ridden company owns STX Europe, Europe's second largest shipbuilding group.
Key state-run creditor Korea Development Bank has called for court receivership, saying it has no more liquidity to settle its maturing debt. Some 52 ships are under construction, but the shipyard has not received any fresh orders so far this year.
STX is the first South Korean shipbuilder to file for court receivership this year as South Korea steps up the restructuring of troubled shipyards and other debt-stricken firms.
The total amount of bank loans to STX is estimated at about six trillion won. Creditors have already classified some of their loans to STX as non-performing, but they should bear additional loan losses.
Creditors may have to pay 1.2 trillion won in their security deposit to ship owners for any unfinished ships once STX is put under court receivership. They extended additional aid of 450 billion won to the shipyard late last year and sought to reorganize its business portfolio to focus on tanker ships and small-sized LNG carriers.
Through aggressive mergers and acquisitions abroad, the STX group nurtured its shipbuilding unit as the world's fifth largest shipyard, but it began falling apart in 2008 when a financial crisis battered the global shipbuilding industry. The crisis forced it to grab orders at lower prices that have undermined its bottom line.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
