South Korea's STX Offshore & Shipbuilding Co. has filed for receivership, following massive losses that have mounted up over the past two years, says a report in the WSJ.
According to multiple sources from the shipbuilding industry, creditors and STX Offshore & Shipbuilding have decided to put Goseong Offshore & Shipbuilding under cou
rt management early next month and have begun taking necessary steps.
The decision has been made after judging that it would be difficult for the small shipbuilder to sustain after its parent company goes under although its order backlog is sufficient to maintain operations until the end of next year.
A Korea Development Bank spokesman
said the firm's creditors will decide on how to proceed with the court receivership process by the end of the month, as the company lacks sufficient funds to meet its financial obligations at end-May.
South Korean shipbuilders - Daewoo Shipbuilding & Marine Engineering and Hanjin Shipping Co Ltd - are facing severe financial troubles as sluggish global economic growth and weak oil prices drove them into deep losses.