Troubles for South Korean shipbuilders keep on coming the latest victim being STX Offshore & Shipbuilding Co.
Specifically, the financially troubled shipyard is likely to enter court receivership as creditors plan to end its financial aid stretching for years now, Yonhap reports citing industry sources familiar with the matter.
Creditors are said to be meeting today, the agenda being the way forward for the ailing shipbuilder, however a decision on proceeding with court receivership has reportedly already been made.
The company’s lead creditor Korea Development Bank, which took over the shipbuilder in 2013, will decide on how to proceed with the court receivership process by the end of the month, as the company lacks sufficient funds to meet its financial obligations at end-May, Reuters reports citing a bank spokesperson.
STX Shipbuilding has received over USD 3.3 billion in assistance however financial woes especially driven by the downturn of the offshore oil and gas sector have not subsided.
The company is said to have accrued over KRW 6 trillion in debt.
Should the creditors move forward with the court receivership they are likely to pay an additional KRW 2.8 trillion in loan-loss reserves, according to Yonhap.
STX Shipbuilding is the latest South Korean yard to be claimed by the country’s troubled shipbuilding industry. The country’s Big Three shipbuilders, DSME, HHI and SHI, have already submitted their self-rescue plans having accrued losses of up to USD 6.7 billion.
Due to the heavy losses, the three yards have launched massive restructuring programs which include layoffs and asset sale aimed at bolstering their liquidity as they struggle to secure more orders.
World Maritime News Staff