Top STX creditor seeks additional $882 million

Creditors overseeing the voluntary restructuring?agreement of STX Offshore and Shipbuilding are seeking to inject an additional 1 trillion won ($882 million) this year to save the flagship of the nation’s 14th-largest conglomerate.

According to industry insiders, main creditor Korea Development Bank recommended the additional funds to seven other creditor banks Monday after accountants at Deloitte Anjin assessed STX Offshore and Shipbuilding’s corporate value at 2.1 trillion won, while its breakup value is 1.19 trillion won.

“This means creditors can snap up about 1 trillion won for saving the ailing shipbuilder compared to selling the stock,” said an industry insider.

Eight creditors already contributed emergency funding of 600 billion won in April and 250 billion won in June.

Market observers said the Korea Development Bank proposal needs the support of creditors that hold a combined total of at least 75 percent of STX Offshore and Shipbuilding’s bonds.

Creditors are scheduled to make a final decision this month.

Chances are creditors will accept the proposal, given that half of the eight creditors are state-run financial institutions, according to market observers. Financial authorities have said the government wants to avoid a collapse of the conglomerate.

Among eight creditors,?four are private?banks - NH Nonghyup Bank, Shinhan Bank, Woori Bank and Korea Exchange Bank. Four are state-run financial institutions - Korea Development Bank, Export-Import Bank of Korea, Korea Institute of Finance and Korea Export Insurance Corp.

STX Offshore and Shipbuilding suffered a net loss of 782 billion won last year and posted an operating loss of 403.4 billion won.

“At least 3 trillion won will be needed to save STX Offshore and Shipbuilding given that it cost us 2 trillion won to save the world’s eighth-largest shipbuilder, Sungdong Shipbuilding and Marine Engineering,” said a creditor who’s familiar with the matter. “Creditors are likely to inject 1.1 trillion won next year to normalize the shipbuilder on the condition that the amount can change, reflecting the global shipbuilding market.”

Meanwhile, in regard to growing speculation that creditors will want STX Offshore and Shipbuilding to take on a debt-to-equity swap and capital decrease as part of voluntary restructuring agreement, the company said in a regulatory filing that the matter hasn’t yet been finalized.

But it confirmed yesterday that a debt-to-equity swap and capital decrease were mentioned during Deloitte Anjin’s presentation on Monday.

“We will make an announcement in a regulatory filing when details are finalized,” the company said.

Market observers said creditors will gradually decrease STX Offshore and Shipbuilding executives’ holdings of company stock to near zero by seeking both a debt-to-equity swap and capital decrease.

That would weaken the power of STX Group Chairman Kang Duk-soo, observers said.

BY Kim mi-ju [mijukim@joongang.co.kr]