STX reaches deal to sell subsidiary to Fincantieri

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STX reaches deal to sell subsidiary to Fincantieri

STX Group finally struck a deal to sell its Europe-based subsidiary to an Italian shipbuilder as part of its financial restructuring agenda.

The group said yesterday that it sold a 50.75 percent stake in STX OSV Holdings at $1 per share to Italy’s state-owned Fincantieri for 768 billion won ($715 million). Fincantieri is the largest shipbuilder in the Mediterranean.

It took almost a year to complete the deal. There were worries about the delayed sale as the euro zone crisis worsened this year. Some in the financial sector had predicted that the two parties might not be able to reach an agreement.

STX had wanted to sell the European branch at 1 trillion won in the initial stage of negotiations.

“The mergers and acquisitions market has been in a slump due to the euro zone fiscal woes,” the group said in a statement.

“But we successfully completed the purchase on the basis of STX OSV’s technology in offshore support vessels.”

The group’s stock price soared 2.39 percent on the news, closing at 8,560 won yesterday.

The group plans to use the fund to ease its credit crunch.

Along with the sale of a 43.1 percent stake in STX Energy to Japanese financial group Orix for 360 billion won early this month, STX will be able to secure a total of 1.13 trillion won.

“By successfully completing the two deals, we can say most financial problems are now solved,” the group said.

As of September, the group was saddled with 3.68 trillion won in debt, up from 3.32 trillion won last year.

Since early this year, STX Group has been seeking to sell units and affiliates as part of efforts to secure cash to put its balance sheet in better shape.

The group has long been ailing since it suffered severely from the 2008 global financial crisis. In total, it wants to raise 2.5 trillion won in order to add liquidity.

STX said last week it will sell off STX Pan Ocean, an ailing shipping business.

The group said it will carry out an organizational restructuring centering on the shipbuilding business by ditching the shipping business because both shipbuilding and shipping markets are faring poorly.

STX Pan Ocean suffered an operating loss of 275 billion won in the first nine months of this year.

The group also plans to keep its efforts to improve its financial health by attracting investments for STX Dalian, conducting the merger between STX Heavy Industries and STX Metal smoothly and selling off the shipping unit next year.

By Song Su-hyun [ssh@joongang.co.kr]
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