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STX Group poised for STX Europe IPO

STX Group poised for STX Europe IPO

Seoul: STX Group, which owns the world's fifth largest shipyard, will go ahead with an initial public offering for STX Europe this year, a senior company executive told The Korea Times.

"The venue could be anywhere; the United Kingdom, Singapore, even Korea, but not before July," Group vc Lee Jong-chul said in an interview with the paper.

Lee also swept away liquidity concerns, explaining that it recently boosted cash and "liquidatable" assets to over three trillion won by successfully issuing 270bn won in corporate bonds. The company's planned listing of its Norwegian unit will add to its liquidity reserve.

He said the offshore-focused Norwegian yard was likely to be the first consideration to go public if the group decides to conduct separate listings of its Europe's units. "Once market conditions show a clear sign of turnaround and investor confidence revives, we will push for the plan," Lee said.

Earlier, the group said it was planning to recover its investment in STX Europe by listing shares on a third market or selling a minority stake.

Norway-based STX Europe, formerly known as Aker Yards, was delisted after STX bought Europe's biggest shipbuilder last year.

"We expect new ship orders to be possible in the second half of the year," the STX vice chairman said. "Currently, our shipbuilding unit has had some measure of difficulty in terms of liquidity. But time will act as a 'buffer' to offset it," he said.

STX Shipbuilding has not reported any new orders since the fourth quarter of last year, with the global shipbuilding industry being buffeted by a deepening credit squeeze, the Korean Times writes.

Although Lee opened the possibility of delaying ship delivery or changes in ship types for clients, the executive said a weakening won is strengthening the ship units' competitiveness.

"When the won-dollar rate drops 100 won, we expect to gain some 7 to 8% profit margin growth," he said, adding Japanese shipbuilders were having more difficulty winning new orders due to the strong yen. STX Shipbuilding is targeting raising new orders for offshore vessels and plants by 80% this year to a combined $1.8bn.

Lee said the group's shipping line STX Pan Ocean also plans to raise its non-bulk business ratio by 30% by 2012. Some 90% of total sales come from the bulk business, according to company officials. "On the back of rising commodity demand from China, the group's shipping unit's financial soundness will remain stable," he said.

Shipping lines have also been hit hardest by the falling demand in international trade and were in serious enough trouble to run fundraising campaigns to pay for vessels they'd ordered.

STX Pan Ocean was holding some 95bn won in liquid assets, including 150bn won raised through a recent bond issue, according to the group's spokesman.  [27/02/09]