Sungdong Shipbuilding & Marine Engineering goes under court
2018.03.23 13:21:16 2018.03.23 13:22:48
Sungdong Shipbuilding & Marine Engineering Co., South Korea’s debt-stricken mid-sized shipbuilder, has applied for court-led reorganization program, the company announced on Thursday.
State-run Export-Import Bank of Korea (Korea Eximbank), the largest shareholder of the troubled shipbuilder made an announcement on March 8 that creditors decided to end the creditor-led workout program for Sungdong whose debts reach beyond 3 trillion won ($2.8 billion).
Creditors concluded they were better off letting go of the troubled shipyard whose liquidation value more than triples its going-concern value. Given its liquidity shortage, the company is most likely to default on its loan obligations within the first half.
Sungdong which debuted in 2004 as a mid-tier dockyard rose to the world’s top 10 based on compensated gross tonnage (CGT) with exports peaking at $1 billion in 2009. But it suffered in the aftermath of global liquidity squeeze following the 2008 financial crisis and slump in the global commerce and oil industry. The shipbuilder received rescue from creditors and went under their management in April 2010.
The Seoul government early this month said Sungdong could save its business name and some dockyards through court reorganization for repair and sub-assembly or block-level building tasks.
Nearly 4 trillion won worth bank funds - 2.5 trillion won in loans and 1.5 trillion won debt swap into equity - have gone into Sungdong since 2010. Korea Eximbank extended 2.1 trillion won in loans and converted 1 trillion won worth into equity.
State-run Export-Import Bank of Korea (Korea Eximbank), the largest shareholder of the troubled shipbuilder made an announcement on March 8 that creditors decided to end the creditor-led workout program for Sungdong whose debts reach beyond 3 trillion won ($2.8 billion).
Creditors concluded they were better off letting go of the troubled shipyard whose liquidation value more than triples its going-concern value. Given its liquidity shortage, the company is most likely to default on its loan obligations within the first half.
Sungdong which debuted in 2004 as a mid-tier dockyard rose to the world’s top 10 based on compensated gross tonnage (CGT) with exports peaking at $1 billion in 2009. But it suffered in the aftermath of global liquidity squeeze following the 2008 financial crisis and slump in the global commerce and oil industry. The shipbuilder received rescue from creditors and went under their management in April 2010.
The Seoul government early this month said Sungdong could save its business name and some dockyards through court reorganization for repair and sub-assembly or block-level building tasks.
Nearly 4 trillion won worth bank funds - 2.5 trillion won in loans and 1.5 trillion won debt swap into equity - have gone into Sungdong since 2010. Korea Eximbank extended 2.1 trillion won in loans and converted 1 trillion won worth into equity.
By Woo Je-yoon and Cho Jeehyun
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