South Korean shipbuilding company STX Offshore & Shipbuilding Co. has initiated discussions to terminate shipbuilding orders in an effort to reduce losses, Yonhap News Agency cited industry sources.
The company could soon cancel the construction of four ships for the tanker shipping company Frontline Ltd, and it is currently in talks to ax another deal for three vessels.
The financially troubled STX Offshore & Shipbuilding Co. received approval to be put under a court-led restructuring scheme after it filed for court receivership with the Seoul Central District Court on May 27.
The shipbuilder, which is said to have accrued over KRW 6 trillion in debt, was given a three-month deadline to submit a self-rescue plan.
STX Offshore & Shipbuilding filed for court receivership after its creditors decided to end their years-long financial aid to the yard, especially since the company lacks sufficient funds to meet its financial obligations due at the end of May.
The company was taken over by its creditors, led by the Korea Development Bank, in 2013 and has received over USD 3.3 billion in assistance to remain afloat.
World Maritime News Staff