The Seoul Bankruptcy Court decided on Monday to early finalize the receivership process of South Korea’s STX Offshore & Shipbuilding.
According to the latest decision from the bankruptcy court, STX has made considerable progress in its economic recovery as it has adhered to the debt payment schedule proposed under its rescue plan.
What is more, the shipyard has also managed to secure an order for four 11,000 dwt tankers for the first time since the beginning of its restructuring, signaling market recovery. The order was placed by Woolim Shipping and Sambong Corp in May this year.
Hence, the shipbuilder will be allowed to pursue business normalization under its creditor banks’ guidance.
In addition, STX is about to sell some of its subsidiaries, including Saint-Nazaire-based shipbuilder STX France, and existing non-core assets in accordance with its bailout plan in order to boost its liquidity.
The cash-strapped shipbuilder filed for court receivership with the Seoul Central District Court, on May 27, 2016.
Following the application, the troubled shipbuilder was assigned to come up with a self-rescue plan aimed at restructuring up to KRW 6 billion of debt.
STX opted for court receivership after its creditors decided to end their years-long financial aid to the yard, especially since the company lacked funds to meet its financial obligations that were due last year. The debt-restructuring receivership was sought so as to prevent the company from entering insolvency.
STX Offshore is the latest of the South Korean shipyards to join the recovery wagon that has seen the country’s Big three, DSME, HHI and SHI emerge from self-rescue plans with considerably improved business results and stacked orderbooks.