STX Group chief to resign from top post of troubled unit

STX Offshore & Shipbuilding Co. said Monday that its chief executive Kang Duck-soo will step down from his post, as the shipbuilder has been suffering from liquidity shortage amid the economic slowdown. Kang is also the chairman of the cash-strapped STX Group, the 13th largest conglomerate, which has seen its major affiliates struggling from liquidity shortages and mounting debt due to the downturn in the shipbuilding and shipping sectors. Last month, Kang also resigned as chief executive of STX Pan Ocean Co., the country's leading bulk carrier. Main creditor Korea Development Bank (KDB) and others have recently urged Kang to step down, as a qualified new outside figure is needed to help the shipbuilder navigate its current financial difficulty. In April, STX Offshore & Shipbuilding requested the creditors supply liquidity in exchange for its voluntary debt-relief and restructuring efforts. At that time, Kang gave consent to the creditors that he would take responsibility for the mismanagement and that he would not raise objection to their moves to reshape the management, according to KDB. The creditors plan to provide fresh liquidity worth about 2.15 trillion won (US$1.96 billion), making the total volume of liquidity injection reach nearly 3 trillion won. A debt-to-equity swap worth 700 billion won and capital reduction are also planned.