Troubled South Korean giant STX Offshore and Shipbuilding saw its share price plunge a daily limit of 15 percent Wednesday for a second straight day on the back of a liquidity crisis.
Hit by sagging global demand, the world’s fourth-largest shipbuilder had Monday sought extensions on loans and other support from eight creditor banks to try to shore up its balance sheet.
STX’s share price plummeted 15 percent Wednesday — following a similar collapse Tuesday — to 4,390 won ($3.93).
“We have asked for the support… to help protect some 35,000 jobs and minimise damage to 1,400 suppliers,” STX said, citing weakening European and US demand, as well as competition from Chinese rivals, for its financial woes.
STX Offshore — the shipbuilding unit of the STX group — logged a net loss of 782 billion won ($699.5 million) on a consolidated basis last year with its debt reaching 12.2 trillion won as of end-2012.
STX group has been seeking to sell units and affiliates to try to secure cash. Its shipping unit, STX Pan Ocean Co., is also for sale but failed to find buyers last week.
The creditors’ possible refusal to extend liquidity could bring about a chain reaction of collapses among the shipbuilders’ subcontractors, market watchers say.
S.Korea shipbuilding giant STX in liquidity crunch
