Sungdong Shipbuilding & Marine Engineering, once one of the top 10 largest shipbuilders in the world a decade ago, is on the verge of declaring bankruptcy, having failed to find any investors at a third auction held this week. The yard has been in court receivership for the past 15 months.
Located in Tongyeong in the southeast of South Korea, a Sungdong bankruptcy would add to the severe unemployment in the city after a number of other yards have folded in recent years.
“After takeover bids faltered for the third time, there’s a high possibility that the court will start taking steps for Sungdong’s bankruptcy and liquidation,” Kim Hyun, an analyst at Meritz Investment & Securities told local newswire Yonhap today. “Its creditors also reportedly decided not to give financial support.”
The state has already pumped around $2.3bn to try and keep Sungdong afloat. The yard started out as an equipment manufacturer before becoming a block builder and then entered shipbuilding 15 years ago.