SOUTH Korea’s STX chaebol is reportedly discussing the sale of its yards in China, France and Finland, as the group’s restructuring gets under way.
The group owns STX France, STX Finland and STX Dalian and also maintains a yard in Jinhae, South Korea. Led by Kang Duk Soo, the chaebol has about 12.2 trillion won ($1.07Bn) in debt as at end-2012.
The Korean stock market reacted positively to widespread Korean news reports about the talks, with STX’s shares closing 1.3% higher at 3,150 won.
STX Offshore & Shipbuilding’s shares closed 1.25% higher at 4,065 won, while shares in its shipping arm, STX Pan Ocean, closed 1% higher at 3,300 won.
The Korean reports prompted the Korea Exchange to seek more information from STX, which confirmed an attempt to sell STX France and STX Finland as part of its restructuring.
When contacted by Fairplay for confirmation, an STX spokesman explained: “Since the authorities have enquired about the issue [of talks], we are legally barred from releasing further information.”
He did, however, confirm that STX is in talks with its creditor banks in China regarding the sale of STX Dalian.
Nonetheless, an official at one of these, Korean Development Bank (KDB), told Fairplay that STX is probably trying to sell its yards in France and Finland to improve its cashflow as intensive restructuring approaches.
STX Pan Ocean is South Korea’s biggest bulker owner and has about $5Bn in debt. In late 2012 STX sold its 50.75% stake in Norwegian offshore vessel builder STX OSV to Fincantieri for 1.13 trillion won.
In April STX Offshore & Shipbuilding announced it was seeking voluntary debt restructuring. Its primary creditor, KDB, has created a private equity fund to assess the viability of buying STX’s 36% stake in STX Pan Ocean.
Late last week KDB and other creditor banks agreed on an emergency loan of 600Bn won to help the company to pay back maturing bonds and the company’s management for 1H13.
“STX is preparing for financial restructuring and by selling its foreign yards, it will get more money to better prepare itself for the redemption period,” the KDB official told Fairplay.
“KDB’s STX financial team is advising the company on the restructuring process so it can be done safely and effectively,” he added.
Links from IHS Fairplay World Shipping