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Creditors approve debt plan for South Korea's STX
[SEOUL] Creditors of South Korea's STX Offshore and Shipbuilding on Friday narrowly approved a debt restructuring plan, avoiding the imminent liquidation of what was once the country's fourth largest shipbuilder.
The agreement came a week after the bankruptcy court handling the case said it had received bids from four foreign shipbuilders for the troubled shipyard and its profitable French unit, which makes cruise ships.
Before voting on the restructuring plan, creditors heard a statement from a court-appointed accountant who concluded that STX would be able to raise a total of 1.0 trillion won (US$860 million) by 2026 through business activities, the sale of non-essential assets and fresh loans.
"The rehabilitation plan is deemed feasible," the statement said.
The vote was extremely close, with creditors holding 66.9 per cent of STX's non-collateralised debt approving the plan - just above the required two-thirds ceiling.
If the plan had been rejected, the company would have been liquidated.
STX sought a court-led restructuring in May after struggling for years with mounting losses caused by mismanagement and a slump in global demand.
Creditor banks have stumped up billions of dollars to keep the company afloat, but its total debts still stand at around 7.0 trillion won.
Four foreign companies have submitted bids to buy STX. The court has declined to identify them, but South Korean media reports named three as Italian shipbuilder Fincantieri, Dutch group Damen and French state-controlled naval shipbuilder DCNS.
The court said last month that buyers could bid to purchase STX Offshore and the French unit separately or as a package.
In 2008, STX bought a 66.6 per cent stake in a huge naval shipyard in the western French port of Saint-Nazaire, later named STX France and currently the company's only profitable unit.
The French state holds a 33.3 per cent share in STX France and is extremely concerned about the future of the shipyard, which is a big local employer with a healthy order book for large cruise liners.