STX ‘legend’ comments on company’s troublesSTX Group Chairman Kang Duk-soo said he feels “great responsibility” for the financial troubles of shipbuilders and offered to relinquish his personal holdings of STX shares to help the nation’s 13th-largest conglomerate stand on its own feet.
“We have sought a voluntary corporate restructuring agreement to minimize losses to our subcontractors and to ensure the job security of our executives and employees,” Kang wrote in an e-mail sent to STX employees on May 7. “I will completely rechart management strategies that put survival as a top priority and I pledge any sacrifice.” Kang added that he is working closely with the company’s creditors.
This is the first time that Kang publicly expressed his thoughts after STX Group, STX Engine and STX Heavy Industries filed for voluntary debt workout programs on May 3.
Kang is a legend in business circles along with Yoon Seok-keum, founder of Woongjin Group, which has been under a court-run restructuring plan since September.
Kang, 63, built the country’s 14th-largest conglomerate after his 2001 takeover of Ssangyong Heavy Industries, where he was chief finance officer, by putting up his personal wealth of 2 billion won ($1.7 million).
STX Group, which was founded with 2 billion won in 2001, recorded over 20 trillion won in revenues and had 30 trillion won in assets in 2009. According to market analysts, STX Group borrowed a total of 12 trillion won from banks and about 1 trillion won of that debt will mature this year. STX Group has suffered a liquidity crunch as orders for new ships plunged significantly since the 2008 global financial crisis.
In a separate but related matter, creditors yesterday gave the green light to voluntary corporate restructuring agreements separately filed by STX Group’s two debt-ridden affiliates, STX Heavy Industries and STX Engine.
The decision comes shortly after creditors approved a voluntary agreement filed by STX Group Tuesday.
According to the main creditor, Korea Development Bank, creditor banks of two affiliates have expressed their intention to support bailing out the troubled companies. The deadline for approving the agreement was yesterday.
“Creditors reacted positively because they figured STX Engine and STX Heavy Industries’ have competitive edges,” said an employee at Korea Development Bank. “Given that these two affiliates’ business areas are deeply linked with STX Pan Ocean, which earlier received an approval for a voluntary corporate restructuring agreement, there is no reason for creditors to oppose supporting STX Engine and STX Heavy Industries.”
By Kim Mi-ju [email@example.com]