Cash injection agreed for Korean shipbuilder STX

Creditors agreed Tuesday on an emergency cash injection of $271 million for the holding company of South Korea's troubled STX shipbuilding group to avert bankruptcy, a leading creditor bank said. The state-run Korea Development Bank (KDB) said STX Corp would receive a total of 300 billion won ($271 million) from its five main creditors. "Some 200 billion won will be provided today to help STX Corp pay a maturing bill," a KDP spokesman told AFP. The group, which has 11 subsidiaries, has been reeling under mounting debt after being hit by a global downturn in the shipbuilding and shipping sectors. More than one trillion won in corporate debt matures this year, including 500 billion won in May alone.On May 3 STX Corp, STX Heavy Industries and STX Engine called for a fresh liquidity injection in exchange for a voluntary restructuring. "We believe other creditors will agree on a separate injection of liquidity into STX Heavy Industries and STX Engine by Thursday," the KDB spokesman said. Creditors have already provided 600 billion won to the group's shipbuilding unit, STX Offshore and Shipbuilding, to help it repay maturing bonds and operate normally. The group pledged late last year to raise 2.5 trillion won by selling domestic and overseas assets, and has since raised 1.13 trillion won. But details of the sale of its European assets have not been disclosed. These include shipbuilders STX Finland and STX France, which is two-thirds owned by STX Europe, a subsidiary of STX Shipbuilding. The other third of STX France is owned by the French state. STX France operates two shipyards, one in Saint-Nazaire and the one in Lorient, while the Finnish operations include three shipyards in Turku, Rauma and Helsinki. In December the Saint-Nazaire yard -- which has struggled to secure major new orders in recent years -- won a lifeline with a billion-euro deal to build a luxury liner for Miami-based Royal Caribbean International. The yard employs 2,100 people and provides work for another 4,000 subcontractors.