CHANGWON -- Creditors of STX Offshore & Shipbuilding Co. said Tuesday they will place the debt-ridden shipbuilder under court receivership as its union failed to accept the company's self-rescue plans.
Creditors led by the state-run Korea Development Bank had said before the deadline that expired at midnight Monday that they can issue refund guarantees for new ships and keep the company afloat if STX Offshore and its union agree on a package of self-help programs that includes a 75 percent job reduction.
But the union refused to accept the proposed massive layoffs though it agreed on a voluntary retirement program and other reductions in work benefits.
Despite warning that the shipyard can be put under court protection, creditors didn't rule out the possibility that STX Offshore and its union will fully agree to drastic restructuring measures.
"The plan, in principle, is to let the courts decide on the company's fate, but if the union accepts the reduction of 500 jobs among others, creditors can help the shipyard stay in business," a
KDB spokesman said by phone.
STX Offshore is set to hold a board meeting to discuss steps to file for court receivership as the company finds there is no other option but to reduce the workforce under the court-led restructuring and seek a potential buyer for the shipbuilder.
If the court finds STX Offshore's value of liquidation exceeds its going concern value, the shipbuilder will be liquidated, the policy lender said.
STX Offshore, once the world's fourth-biggest shipbuilder by orders, was placed under court receivership in 2016 and graduated from the program in July 2017.
South Korean shipbuilders have been struggling with declining orders amid a global economic slowdown after they were hit hard by the 2008 financial crisis.(Yonhap)