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Daily: STX shipbuilder facing bankruptcy

The crisis enveloping the South Korean-owned shipbuilder STX deepened as the company revealed that it failed to sell its affiliate STX Pan Ocean.

STX Europen Turun telakka joulukuussa 2012.
The STX shipyard in Turku is also living on the edge. Image: Yle

The daily Turun Sanomat reported Wednesday that the South Korean-owned shipbuilder STX Corporation is teetering on the brink of bankruptcy. On Tuesday the shipbuilding unit STX Offshore and Shipbuilding voluntarily filed for debt restructuring with its creditors. According to Turun Sanomat, this year alone, the company will have to fork out over one billion euros to repay its debts.

The crisis appeared to be deepening, as STX revealed last weekend that it had failed to offload its bulk carrier shipbuilding affiliate STX Pan Ocean. On Tuesday shares in STX Offshore plummeted 15 percent. Shares in the parent company STX Group also shed 15 percent in value. The decline is the largest permitted on the Seoul stock exchange.

According to the Reuters news agency, financiers will be looking this week to stabilise the company. Meanwhile Korean analysts say one possible option would be for majority shareholder in STX, the state-owned Korean Development Bank to assemble an ownership cluster to take over the beleaguered shipbuilder.

STX has already sold off a considerable chunk of the business group. Late last year the Italian shipbuilder Fincantieri shelled out 455 million euros to purchase for a majority stake in the offshore shipbuilding business STX OSV.

STX also struggling in Finland

STX runs two shipyards in Finland in Rauma and Turku, both in southwest Finland.

Earlier this year the Finnish government drew up a programme of some 40 million euros in subsidies to help the company's Turku-based shipyard to secure two luxury liner orders that could help secure its future. The Turku operation had previously lost a lucrative luxury cruise liner offer to another STX shipyard in France.

The Turku shipyard also raised an additional 23 million euros in a buy and lease-back arrangement in which the government purchased the Turku property to lease it back to the shipyard.

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