Changing of the guard at embattled STX Group

A personnel shuffle at cash-strapped STX Group and its affiliates has taken place with a handful of top executives of the nation’s 13th-largest conglomerate stepping down to pave the way for creditors to restructure the troubled company.

According to the Korea Exchange’s KIND (Korea Investor’s Network for Disclosure) system yesterday, Lee Woong-hyung, vice president and executive director of STX Group, resigned Monday.

Kim No-sik, chief financial officer and vice president of STX Offshore and Shipbuilding, and its senior managing director, Lee Soo-jung, also left the company.

Those departures follow the resignation of Byun Yong-hee, chief financial officer and president of STX Group, on Friday.

Korea Development Bank (KDB) had demanded the resignations of financial affairs executives in return for providing emergency funds to the ailing company. KDB is the main creditor overseeing a voluntary restructuring plan sought by the shipbuilder.

“Some STX executives have left the company as they felt they need to take?responsibility for having the company file a voluntary restructuring plan .?.?. and this has naturally triggered personnel restructuring,” said an employee at STX Group.

In May, creditors approved a voluntary restructuring agreement filed by STX Group which has suffered a liquidity crunch as orders for new ships plunged significantly after the 2008 financial crisis.

A voluntary restructuring plan is not legally binding, like court-led restructuring. It is regarded in business circles as a low-degree workout program because creditors have supervision authority.

STX Group borrowed a total of 12 trillion won ($10.7 billion) from banks and about 1 trillion won of that debt will mature this year.

Market observers say the shipbuilder is likely to continue shedding executives as personnel restructuring is typically the first measure used by a company when it gets financial support from creditors.

Kumho Asiana Group and now defunct Daewoo Group took similar measures, they said.

Meanwhile, stock prices of STX and its affiliates tumbled. STX Pan Ocean closed at 2,565 won and STX Group at 1,730 won yesterday after falling the 15 percent daily limit.

STX Offshore and Shipbuilding sank 9.26 percent to finish at 3,135 won, and STX Heavy Industries closed at 2,510 won, down 6.17 percent.

Woori Bank wants to sell off its 653,000 shares of STX Group that Kang Duk-soo, the STX chairman, used as collateral in return for loans to IT services affiliate STX ForceTec.

It wants to recoup the conglomerates’ loans as soon as possible before the shipbuilder’s stock price falls further.

Meanwhile, Korea Development Bank has given up its plan to acquire the group’s flagship affiliate STX Pan Ocean, and market observers say this leaves STX Pan Ocean no other option but to file a court receivership. STX Pan Ocean is expected to make a decision by tomorrow.

By Kim Mi-ju [mijukim@joongang.co.kr]