Troubled STX plans to lay off 930 and cut salaries

Financially troubled shipbuilder STX Offshore & Shipbuilding said on Friday that it will lay off 930 employees - 34 percent of its workforce - and cut the wages of remaining workers by 10 percent in a bid to stabilize the company.

It is the second restructuring plan the company has launched. In 2013, it cut 24 percent of its workforce as part of conditions to receive 4.5 trillion won ($3.8 billion) of financial support from creditors, including its major shareholder, Korea Development Bank (KDB).

But as the company continued to suffer financial hardship due to struggling businesses, the creditors will give 453 billion won of additional financial support.

Creditors said they were not considering court receivership on STX. They said the shipbuilder will cease offshore businesses and large container ship manufacturing where the competition is fierce, and will focus on small-scale businesses including building small tankers.

As part of its efforts to raise cash, the shipbuilder sold its subsidiary STX France LNG Engineering on Wednesday. LNG Engineering studied things necessary to manufacture LNG bunkering ships. According to creditor KDB, it said it wasn’t necessary to have the affiliate since STX France doesn’t make LNG carriers anymore.

STX is also trying to sell STX France. KDB said it recently discussed selling STX France to global cruise makers and also tried to sell it to Daewoo Shipbuilding & Marine Engineering without success.

STX currently owes 6.4 trillion won to local banking institutions.

BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]