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STX Offshore & Shipbuilding heading for court receivership

STX Offshore & Shipbuilding heading for court receivership
South Korea’s STX Offshore & Shipbuilding is heading for court receivership within this month after its prolonged financial difficulties, according to the company’s lead creditor Korea Development Bank (KDB).

A KDB spokesperson said the company’s creditors will decide on how to proceed with the court receivership process by the end of May, the local media reported.

“Considering the company's financial situation, we think it may be unable to make a debt payment due at the end of May,” a KDB statement was quoted by the Korea Times. “In particular, the company is in danger of being forced to stop building ships as foreign shipowners are seeking to seize its assets in compensation lawsuits.”

STX, a mid-sized Korean yard, has been under the control of its creditors since April 2013, amid the protracted slump in the shipbuilding industry.

Creditors had pumped in over KRW4trn ($3.4bn) into STX but the shipbuilder remained unable to turnaround its dire financial state.

Last year, creditors extended around KRW450bn in additional aid to STX in a bid to reorganise its business portfolio to focus on tankers and small LNG carriers.

Apart from STX, other reputable and sizable Korean shipyards and shipowners are also facing financial troubles. The three biggest Korean yards, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, are going through restructuring while owners such as Hyundai Merchant Marine and Hanjin Shipping are weighed down by massive debts.