A Series of Bankruptcy Expected
According to industry sources, ForceTEC, an STX Offshore & Shipbuilding subcontractor, filed for court receivership with the Changwon District Court. Under the circumstances, concerns are on the rise over the possibility of successive bankruptcies of firms affiliated with STX Offshore & Shipbuilding. ForceTEC is a heavy shipbuilding equipment lender and shipbuilding material supplier and transactions with STX Offshore & Shipbuilding account for 70% of the total sales of the company.
ForceTEC is the first STX Offshore & Shipbuilding subcontractor that filed for court receivership. The firm’s financial difficulties began early last month, when STX Offshore & Shipbuilding went into receivership and payment to be made by the shipbuilder became rehabilitation bonds. ForceTEC failed to prepare 24 billion won for its sub-tier suppliers and filed for court receivership in the end.
In the meantime, the STX Partners, which is a group of STX Offshore & Shipbuilding subcontractors, recently mentioned that its 300 or so members are in the face of losses of approximately 200 billion won as a result of the receivership of the shipbuilder.
Many in the South Korean shipbuilding industry are considering that successive bankruptcies have just begun. The shipbuilding facility operations of not only STX Offshore & Shipbuilding but also the others are predicted to be reduced from late this year to cause a large number of partner firms and suppliers to suffer.