[Yonhap News Photo]
A South Korean court allowed STX Offshore & Shipbuilding, an ailing shipyard, Tuesday to work out a restructuring program under court receivership in a sign that it could avoid liquidation.
The Seoul Central District Court said it has asked STX to submit its self-rescue scheme by September 9. The troubled shipyard filed for court receivership on May 27 after creditors concluded that it has no chance of coming back despite a massive injection of liquidity.
STX, once the country's fourth-largest shipbuilder, has been kept afloat with a bailout fund of more than four trillion won (3.42 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.
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.
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
