STX to Acquire Daehan Shipbuilding Co.

South Korea’s STX is to take over Daehan Shipbuilding Co., an enterprise of middle standing in South Korea currently under the workout program, or company restructuring program. STX said Wednesday that it submitted a proposal for participating in the main bid for acquisition of Daehan Shipbuilding proceeded by creditors including Korea Industrial Bank (KIB) on March 16. In the main bid, two or three other shipping companies have participated, including STX and a shipping company from the United Arab Emirates (UAE).
Creditors plan to have individual negotiations on debt adjustment and conversion of investment with bid participants for about one month.
"Acquiring Daehan will pose a relatively less financial burden for us as the creditors will make a debt-equity swap of Daehan Shipbuilding’s debt," and "The size of docks in Daehan’s shipyard is much larger than ours. I am sure it will create a great synergy when we take over the Daehan shipbuilding," a source from STX said.
STX, which owns shipyards in STX Dalian in China and STX Europe, has small scale shipyards that are size of one million square meters (300,000 pyung) in Jinhae, South Gyeong-sang Province and 20,000 square meters (6,000 pyung) shipyard in Busan, South Korea.
STX, the world’s 35th shipbuilding company based on current backlog, registered 307.3 billion won ($ 271.4 million) in revenue and 23.3 billion won in operating loss in 2009.