The tender for South Korea’s mid-sized shipbuilder Sungdong Shipbuilding & Marine Engineering Co. (Sungdong) has drawn six contenders, raising prospects for its sale after three failures.

According to financial industry sources on Wednesday, six candidates submitted their offer to the Changwon District Court. Among them, two to three potential buyers met the requirements of price offering of over 300 billion won ($265.2 million) and funding plan to raise 10 percent of their offered price. The previous three attempts to sell the cash-strapped shipbuilder fell through as no one met the qualifications.

The strongest contender is a consortium between HSG Heavy Industries and Curious Partners Investment, according to market sources. The plant manufacturer based in Changwon, South Gyeongsang Province, expressed its will to take over entire assets of Sungdong. The court will select a preferred bidder around early next week.

Sungdong ranked the world’s eighth largest shipyard as of 2007 but began collapsing since the 2008 global financial crisis. It entered court receivership in March 2018 but its business grew worse amid the industry slump. Most of its shipyards currently sit idle with no order backlog, and 600 out of its 750 workers have been on unpaid leave program in rotation.

It was the fourth attempt for the court and its creditors have put the shipbuilder on sale after they failed to find a suiter who could meet the minimum requirements for the bidding price in the previous three attempts.

Market experts estimated that a new buyer would need 310 billion won to take over Sungdong and an additional 150 billion won to run the business in the first year. The shipbuilder’s yearly operating loss amounts to 33.3 billion won. As of the end of last year, it had 939.4 billion won in assets but overwhelmed by liabilities of 2.7 trillion won.

By Kim Gang-rae and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]