chief of cashstrapped stx pressed to sell his assets
Last Updated : GMT 21:59:42
Arab Today, arab today
Arab Today, arab today

Chief of cash-strapped STX pressed to sell his assets

Arab Today, arab today

Arab Today, arab today Chief of cash-strapped STX pressed to sell his assets

Seoul - Yonhap

Creditors of STX Group are pressuring the group chief to take all possible actions including the disposal of his private assets to keep the troubled shipbuilding conglomerate afloat, sources said Thursday. STX Group, the 13th biggest conglomerate, has seen its major affiliates struggling from liquidity shortages and mounting debt due to the downturn in the shipbuilding and shipping sectors. Creditors and the local financial regulator are putting pressure on STX Group Chairman Kang Duk-soo to show strong willingness to do whatever action is needed in return for receiving acute liquidity, according to sources. The creditors of STX Group\'s troubled units provided liquidity or are reviewing the liquidity supply in exchange for voluntary debt-relief and restructuring efforts. On May 3, STX Corp., the group\'s holding company, and its two units -- STX Heavy Industries Co. and STX Engine Co. -- requested that the creditors provide liquidity in exchange for corporate overhaul. \"The group head should give up his own assets to help the group survive,\" said an official at the financial authorities, asking not to be named. Chairman Kang holds a 9.9 percent stake in the holding company, which has 10 affiliates, including STX Pan Ocean Co. and STX Offshore & Shipbuilding Co., under its wing. \"I am ready to do whatever it takes and put up with any difficulties,\" Kang said in an e-mail to his employees. The planned corporate overhaul is expected to reshape STX Group into a shipbuilding-focused group as the group has been seeking to sell its affiliates in a desperate bid to tide over the liquidity crunch, industry watchers said. According to industry data, the group has debts worth 1 trillion won (US$897.9 million) that come due within this year, of which 500 billion won comes to maturity this month. Main creditor Korea Development Bank (KDB) and others have agreed to pump a combined 900 billion won into STX and its shipbuilding unit STX Offshore & Shipbuilding. They are now reviewing plans to inject liquidity into troubled STX Heavy Industries and STX Engine. The liquidity supply will allow the group\'s affiliates to be able to receive liquidity and defer debt repayment in return for undergoing a stringent corporate overhaul. A potential denial of liquidity injection could spark a chain reaction of collapses among affiliates, raising chances that the group will face a tougher debt-rescheduling program or court receivership, industry watchers said. The group is seeking to sell its troubled affiliates as part of its efforts to secure cash. As for shipping unit STX Pan Ocean Co., KDB has almost reached a tentative conclusion that it would be difficult for its private equity fund to buy the shipper as its financial health remains in bad shape, according to industry sources. Since the group failed to find a buyer for STX Pan Ocean in March, it has requested a private equity fund managed by KDB to consider the purchase. STX Corp. holds a 27.4 percent stake in STX Pan Ocean, followed by KDB with 14.99 percent. But the financial regulator is reportedly opposed to KDB\'s move to give up the purchase as the collapse of Korea\'s No. 3 shipper is feared to undermine the Korean shipping industry. Shares of STX Pan Ocean closed at 2,865 won on the main bourse, down 13.7 percent from Wednesday\'s close.

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