STX Offshore & Shipbuilding may be put under a court-led restructuring scheme, paving the way for the shipyard to avert liquidation, says a report in Korea Times quoting local court.
Last month, STX Shipbuilding, once Korea's No. 4 shipbuilder, filed for receivership to stay afloat as its creditors decided to end a similar rehabilitation program for the shipbuilder.
The shipbuilder is required to submit its self-rescue plan to the Seoul Central District Court by Sept. 9.
“It is regrettable that we have been put under court receivership but it is also fortunate at the same time that we avoided the worst-case situation,” STX CEO Lee Byung-Mo said in a message to employees.
“Steps for recovery will be a tough road and all employees will have to share the pain…but let’s try to overcome this crisis wisely,” AFP quoted him as saying.
Under the receivership plan, Lee has to draft a restructuring plan by early September under court supervision. The firm currently faces outstanding debts worth 300 billion won ($258.3 million).
The weak shipping markets and the shrinking growth of maritime trade hit the world’s three largest shipyards, all in South Korea are located, fully. The shipbuilding industry tens of thousands of jobs are at risk.
STX Offshore & Shipbuilding 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.
Despite over 4 trillion won ($3.36 billion) in financial aid from its creditors, the shipbuilder logged an operating loss of 314 billion won last year following a loss of 1.5 trillion won the previous year.