South Korean midsize shipbuilder Sungdong Shipbuilding and Marine Engineering has been placed under court receivership, Yonhap reports citing a court official.
The court is yet to decide whether to liquidate the yard or resume operating under a growing concern principle. The final ruling will be made based on the report from auditing firm Deloitte Anjin LLC, which has been tasked to assess the company’s value of liquidation and its going concern value, the Korean news agency said.
The court move comes on the back of the yard’s financial downfall prompted by lower order intake and the overall slump in the shipbuilding industry which brought many shipbuilders to their knees.
Namely, the yard received only five orders in 2017, a major drop from over 40 in 2013. The company hasn’t received any orders this year and is without capital.
The court receivership plan was announced in March this year, with the survival of the cash-strapped yard being put to question even if further cash injections are provided due to its long-term losses.
The shipbuilder has been under restructuring for over the past eight years, with over USD 2.5 billion of funds said to have been injected into the yard since. The restructuring process has been led by its main creditor the Export Import Bank of Korea.
World Maritime News Staff