South Korea court plans package sale of STX, French unit

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Seoul (AFP)

A South Korean court handling the bankruptcy case of STX Offshore and Shipbuilding Co., said on Tuesday it could announce the bundled sale of the company with its profitable French shipyard unit later this week.

STX France, which specialises in building cruise ships, is the only profitable unit of STX Offshore, which filed for receivership in May.

Originally it was assumed that the French unit would be sold off separately as part of a general restructuring plan, but the bankruptcy court signalled its preference for selling the two companies as a package.

"The court is seeking to sell STX Offshore together with STX France as one bundle," said Choi Ung-Young, a judge who acts as a spokesman for the Seoul Central District Insolvency Court.

A court notice to that effect would be issued "this week", Choi said.

The court will then call in STX Offshore stakeholders and creditor banks on November 11 to approve the sale proposal and overall restructuring plan.

Once South Korea's number four shipbuilder, STX Offshore has struggled since the global financial crisis with slumping demand and competition from low-cost Chinese rivals.

Creditor banks have stumped up more than four trillion won ($3.5 billion) to bail the company out, but its total debts stood at 7.3 trillion won as of June.

In 2008, STX bought a 66.6 percent stake in a huge naval shipyard in the western French port of Saint-Nazaire, later named STX France.

The French state holds a 33.3 percent share 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.