A local court on Tuesday approved a filing by financially shaky STX Offshore & Shipbuilding Co. to be put under a court-led restructuring scheme, paving the way for the shipyard to avert liquidation.
Last month, STX Shipbuilding, once the country's No. 4 shipbuilder, filed for receivership to stay afloat as its creditors decided to end a similar rehabilitation program for the shipbuilder.
The shipbuilder has been under the control of its creditors since April 2013 amid a protracted slump in the shipbuilding sector.
Despite over 4 trillion won ($3.36 billion) in financial aid from its creditors, the shipbuilder logged an operating loss of 314 billion won last year following a loss of 1.5 trillion won the previous year.
The shipbuilder is required to submit its self-rescue plan to the Seoul Central District Court by Sept. 9.
STX Offshore & Shipbuilding was affiliated with the now-defunct STX Group that had a business portfolio that ranged from construction and shipping to shipbuilding and energy.
It is one of the local shipyards that have been suffering massive losses due to delays in the construction of offshore facilities and an industrywide slump.
Policymakers and financial authorities have vowed to push for the restructuring of troubled smaller players to revamp the nation's shipyard industry.
The creditors of STX Shipbuilding have 5.5 trillion won in financial exposure to the shipyard, with the state-run Korea Development Bank taking the largest amount of 3 trillion won. (Yonhap)