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South Korea’s STX Offshore May Be Sold as Part of a Package Deal


The South Korean bankruptcy court handling the insolvency proceedings of STX Offshore & Shipbuilding Co. said Tuesday it may sell the troubled shipyard together with its French unit that makes profitable cruise ships.

“A foreign company has shown interest in buying three STX companies together. We’re looking into such a possibility,” said Choi Ung-young, a judge and a spokesman for the Seoul Central District Court.

Mr. Choi declined to identify the foreign company.

A final decision will come after the creditors and bondholders of STX Offshore decide on a rehabilitation plan to be presented by the company later next week, the judge said. If rejected, STX could face liquidation.

STX, which filed for receivership in May, is Korea’s fourth-largest shipyard and a unit of conglomerate STX Corp. STX is active in shipping, construction and energy around the world.

As part of a restructuring plan, the company has been looking to sell STX France, which specializes in building cruise ships and is the only profitable unit of the parent, with a full order book for the next seven years.

Italian shipbuilding giant Fincantieri SpA and Dutch counterpart Damen Shipyards Group are in the running to buy STX France, a person with direct knowledge of the matter told The Wall Street Journal last month.

The Seoul court judge said a package deal, if implemented, would include the sale of STX Offshore, its French unit and Goseong Offshore & Shipbuilding Co., a Korea-based unit that manufactures container ships and ship components.

“It’s too early to say we’ll proceed with a package sale because many firms initially express their interests in companies under court receivership, but never bid when it’s up for sale,” Mr. Choi said.

Korean shipyards, including the world’s three largest— Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co.—are restructuring, led by creditor banks that have struggled to rehabilitate the embattled shipbuilders through the sale of noncore assets.

Profits at Korean shipbuilders began sliding when the 2008 global economic crisis damped orders from shipping companies, and lower-cost Chinese rivals made market inroads.

STX Offshore creditors have injected billions of dollars to bail it out, but it still ran a 314 billion won ($284.4 million) operating loss last year, following a 1.5 trillion won loss in 2014. The company owes financial institutions nearly 6 trillion won.

Source: Wall Street Journal

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