STX chosen as preferred negotiating partner for Daedong shipbuilding

STX Corp., formerly Ssangyong Heavy Industries was selected as the preferred negotiating partner to acquire Daedong Shipbuilding, which went into court receivership in 1997.

According to Daedong Shipbuilding, the Seoul District Court confirmed STX as the preferred negotiating partner on the afternoon of August 27.

Among 5 - 6 competitors to take over Daedong Shipbuilding, STX presented the best plans for management normalization including debt clearance and issuing new bonds. After screening, STX will contract for a final take over.

During bidding, STX offer a higher price for undertaking Daedong Shipbuilding than Hanjin Heavy Industry, a strong by-liner.

Daedong Shipbuilding has been under court receivership since 1998 and expects 470 billion won of sales and 40 billion won in ordinary profits because of the recent surge in shipbuilding.

After finishing streamlining, Daedong Shipbuilding expects to secure around 500 billion won worth of orders at the end of this year. It received 360 billion won in orders as of August, the largest amount of orders it has had since going up for sale.

STX plans to involve itself in the domestic shipbuilding market after successfully taking over Daedong shipbuilding and expects to post over 100 billion won in profit on an annual basis.

The recent swell in the shipbuilding industry favored Daewoo Shipbuilding and Merchant Engine, allowing them an earlier than expected release from their workout programs. Daedong Shipbuilding also is expected to get out from under court receivership early.