SEOUL?The sale of South Korea's STX Offshore & Shipbuilding Co. has been halted after a Seoul bankruptcy court handling the case disqualified a bidder that hoped to buy all of the company's assets as a package.
A U.K. investment fund, which earlier this month submitted a letter of intent to buy all of STX Offshore's assets, including shipyards in Korea and abroad, dropped out of the race because it couldn't demonstrate how it could raise needed money, a judge and spokesman for the Seoul Central District Court said Friday.
"We'll have to restart the sale process for STX sometime next year by inviting bids again," he said.
But the judge said the sale of STX France?STX Offshore's profitable French unit, which makes cruise ships?will proceed as scheduled.
Earlier this month, the court said that it received four bids and hoped to see a deal concluded by the end of year.
Bidders had the choice of purchasing STX Offshore, the French unit and another South Korea-based shipyard separately or as a package.
The three other bidders?Italian shipbuilding giant Fincantieri SpA, Dutch counterpart Damen Shipyards Group and French state-controlled naval shipbuilder DCNS?showed interest only in STX's French unit, the sole profitable asset of the Korean shipbuilder. STX France has a full order book for the next seven years.
The three parties are required to submit their binding takeover proposals by Dec. 27.
The sale of STX France is a key part of the restructuring plan by STX?Korea's fourth largest shipbuilder? which filed for receivership in May and owns two-thirds of the French unit.
Creditors have pumped in billions of dollars to bail out STX Offshore, but it still ran up a 314 billion won ($265.6 million) operating loss last year, following a 1.5 trillion won loss in 2014. The company owes financial institutions nearly six trillion won.
Korea is home to the world's three largest shipyards: Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. All three are undergoing corporate overhauls that include layoffs and the sale of noncore assets, after being buffeted by shrinking orders amid weak freight rates and competition from lower-cost Chinese rivals.
Write to In-Soo Nam at In-Soo.Nam@wsj.com
(END) Dow Jones Newswires
November 25, 2016 03:55 ET (08:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.