Creditors set to salvage ailing STX Group's holding company

Creditors of STX Corp., the holding company of ailing STX Group, have agreed to provide liquidity in return for its corporate overhaul efforts to help it cope with a credit crunch, sources said Tuesday. The main creditor, Korea Development Bank, has received approvals from other creditors to implement rescue measures for the company and plans to reach a preliminary deal with it this week, according to sources. The rescue measures include a debt-to-equity swap worth around 700 billion won (US$660.3 million) and an appointment of an outside professional manager, they said. STX Group, the 13th-biggest conglomerate, has seen its major affiliates struggling from liquidity shortages and mounting debt due to the downturn in the shipbuilding and shipping sectors. The rescue measures for STX Corp. follow similar deals for the group's three other troubled units -- STX Offshore & Shipbuilding, STX Heavy Industries and STX Engine. The creditors plan to conduct a debt-to-equity swap and reduce capital before March in a bid to prevent shares of STX Corp. from being delisted from the main bourse, they noted. STX Group has 10 affiliates, including STX Pan Ocean and STX Offshore & Shipbuilding, under its wing.