SEOUL, KOREA - STX Offshore & Shipbuilding will receive a cash injection of 300 billion won from Korea Development Bank by early next week at the earliest. The creditor banks of the shipbuilder held on May 30 a working-level meeting and discussed whether to lend an additional fund for the company's working capital.
Most creditors were against a proposal to lend more as they have not yet completed due diligence on the company. Korea Development Bank, the principal creditor, was thus forced to lend 300 billion won alone. All other future needs must be borne by all creditors according to their debt share.
A creditor bank official said, "If the shipbuilder is unable to complete ship orders in time, it must pay late delivery charges and may have to pay back refund guarantees. In order to avoid these from happening, we had to ask Korea Development Bank to lend 300 billion won and decided to discuss later what to do for additional fund needs.
Earlier in April, the creditor banks had provided 600 billion won to STX Shipbuilding. Of this, 500 billion won was used to pay for redeeming corporate bonds coming due. For this reason, the company needed more working capital to build the ships whose construction is already underway.
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