STX Shipbuilding’s Creditors Not On Board with Financial Aid Plan
Certain creditors of the South Korean shipbuilder STX Offshore & Shipbuilding Co. voiced their disapproval of a financial aid package to the troubled shipbuilder worth KRW 450 billion (USD 385 million), Yonhap news agency reports.
As informed, Woori Bank and KEB Hana Bank, who hold 10 percent stake in the yard, do not want to back the bailout plan amid deteriorating condition in the shipbuilding industry.
However, their support is not expected to impact the realization of the financial aid as creditors, led by the state-run Korea Development Bank (KDB), are moving ahead with the activities to save the shipbuilder from a liquidity shortage.
The lifeline does come with a catch, as STX Offshore had to agree to cut its workforce in exchange for the aid. As a result, the deal is expected to cost the labor union some 800 jobs, or 30 percent of the shipbuilder’s workforce by the end of 2016.
The company, once the world’s fourth biggest shipbuilder, has been under control of its creditors for two years now having compiled a debt of USD 3.5 billion amid a prolonged industry slump.
World Maritime News Staff