STX Offshore Falls on Voluntary Debt Restructuring: Seoul Mover

STX Offshore & Shipbuilding Co. (067250) led declines among STX Group units in Seoul trading as it seeks help from creditor banks, a sign the company’s finances are deteriorating.

STX Offshore slumped by its 15 percent daily limit, the biggest decline since its listing in October 2003, to close at 5,160 won in Seoul. STX Corp., the holding company of STX Group, dropped 15 percent to 5,370 won.

STX Group has been selling assets, including its entire stakes in STX OSV Holdings Ltd. (SOH) and STX Energy Co., as it seeks to raise 2.5 trillion won ($2.2 billion) to pay debt. A slump in dry-bulk freight rates and a collapse in demand for new ships caused its two main units to report losses last year. It failed to attract bidders to sell shares in STX Pan Ocean (028670) Co. last week.

“Things seem to be getting worse for STX Group,” said Park Moo Hyun, an analyst at E*Trade Securities Korea in Seoul. “The group needed to sell STX Pan Ocean stake to raise funds to repay maturing debt.”

STX Offshore is seeking voluntary debt restructuring with creditors to help improve its finances, according to a regulatory filing. The company has been facing difficulties since 2008 as orders for new ships plunged amid a slump in the shipping industry, it said in an e-mailed statement today.

STX Heavy Industries Co., Pan Ocean and STX Engine Co. (077970) fell by their daily 15 percent limit in Seoul.

No Sale

The group didn’t receive any letters of intent for its stake in Pan Ocean, STX Group said March 29 after the market’s close. The group said yesterday it will discuss the sale plan with its main creditor bank.

State-owned Korea Development Bank, the main creditor bank and Pan Ocean’s second-largest shareholder, said last month it will consider buying the stake in the commodities shipping company should STX Group fail to find a buyer in the public bid.

STX’s three main companies, Pan Ocean, STX Offshore and STX Corp. (011810), have 1.16 trillion won in bonds and loans maturing this year, about 20 percent of their outstanding debt, according to data compiled by Bloomberg. The group’s companies are interlinked through cross-shareholdings.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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