[UPDATES] Creditors discuss court receivership for STX shipyard

By Park Sae-jin Posted : May 25, 2016, 09:20 Updated : May 25, 2016, 16:21

[Yonhap News Photo]



Creditors strongly hinted at placing STX Offshore & Shipbuilding under court receivership Wednesday, saying the ailing shipyard 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 (3.37 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.

Korea Development Bank said after a meeting of creditors that STX could be put under court receivership soon to avoid bankruptcy as it has no more liquidity to settle its maturing debt.

The state-run bank did not say whether the shipyard would be liquidated, but Finance Services Commission chairman Yim Jong-yong did not rule out the possibility of liquidating the shipyard or shutting down its docks. "We will get it after (STX) was put under court receivership."

Some 52 ships are under construction, but the shipyard has not received any fresh orders so far this year.

If creditors agree, STX will be the first shipbuilder to be put under court receivership 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
 
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