STX Offshore & Shipbuilding Co., which has had difficulties in receiving new orders due to stricter regulations on financial support, heaved a sigh of relief after a long time. The company received a refund guarantee that had been delayed for four months.
STX Offshore & Shipbuilding announced on Sept. 12 that the state-owned Korea Development Bank (KDB) offered a refund guarantee on orders of two 50,000-ton petrochemical product carriers for the second option that it has won from Ocean Gold Tankers Inc., a ship management company in Greece. The vessels will be built in Jinhae Shipyard and be delivered by the first quarter of 2020.
The South Korean government decided to revive STX Offshore & Shipbuilding at a cabinet meeting specifically aimed at upgrading our industrial competitiveness in April, instead of liquidation, but the company has had found difficult to win new orders. This is because financial companies have been reluctant to inject new funds after reducing an exposure to the shipbuilding industry. In fact, STX Offshore & Shipbuilding received a letter of intent (LOI) to build seven vessels in Aug. but the contract was terminated as KDB Bank, which thought that the company would have a cash flow issue next year, didn’t grant approval.
STX Offshore & Shipbuilding received RG for the first time in four months after May. This is largely due to the fact that company has been selling off its major non-business purpose assets to improve the short-term liquidity. Meanwhile, STX Offshore & Shipbuilding laid off 157 production workers for the last time in March, carrying out restructuring several times to stabilize the business. Currently, its backlog of orders comes to 17 in total, including two carriers from the latest contract.