The lead creditor of STX Offshore and Shipbuilding, a major South Korean shipbuilder, has confirmed the yard will enter court receivership.
“As there is no justification or benefit in providing additional financial support to continue the voluntary agreement, an application for court receivership is unavoidable,” the Korea Development Bank has said in a statement.
The plan is now to get the Jinhae-based yard, once the world’s fourth largest shipbuilder, to work through its 52-ship backlog, while a buyer will be sought to take it on, or it will be liquidated once the orderbook is complete. The yard has received no new orders for the past eight months.
STX Offshore & Shipbuilding has been under creditor-led restructuring since April 2013. It was formerly part of STX Group, which went bankrupt causing a huge sell off of subsidiaries, including shipping line Pan Ocean, and most recently STX Dalian, the group’s huge Chinese yard.
STX Offshore & Shipbuilding was known as Ssangyong Heavy Industries before it was bought out by STX founder, Kang Duk-soo. Kang was sentenced for six years in jail in 2014 for fraud, a ruling that was overturned the following year.
Creditors have pumped in more than $3bn into the yard in the past two years, but it is still losing money.
