SEOUL, KOREA - After reviewing the feasibility of acquiring STX Pan Ocean, Korea Development Bank decided not to acquire the shipping company due to higher-than-expected debts, according to a source close to the deal.
KDB conducted a preliminary due diligence and evaluation on the potential to acquire STX Pan Ocean. As a result of the due diligence, KDB reached a conclusion that it cannot take over the shipping company as the latter's book value is near to zero.
KDB attempted to reveal the results of its due diligence but the financial authority put a brake on KDB's move. In late March, the liquidity-starved STX Group asked KDB's private equity unit to buy its shipping subsidiary after receiving no bids for it.
KDB formed a task force, including advisors from law and accounting firms, and carried out a preliminary inspection on STX Pan Ocean's asset value, debt scale, and the potential of its revival. As a result of the inspection, KDB made a tentative conclusion not to acquire the shipping company due to higher-than-expected debts.
STX Corp., a holding company of STX Group, is the largest shareholder of STX Pan Ocean with a 27.36-percent stake, followed by KDB with a 14.99-percent stake.
