Indebted South Korean shipbuilder Sungdong Shipbuilding & Marine Engineering on Sept. 30 kicked off its fourth attempt to sell, in a move to shun looming liquidation before the end of 2019.
The Tongyeong-based company’s existing stake and newly-issued shares, plus two additional shipyards, which are 425,000 square-meter wide if combined, are roughly estimated at 300 billion won ($250.3 million).
Courtesy of Yonhap
According to a public notice, letters of intent will be accepted till Nov. 8. followed by due diligence for three weeks. The sale and purchase agreement with a buyer to acquire the company must be signed by Dec. 31 in order for the shipbuilder to avert a court order for bankruptcy. Seoul-based Samil PricewaterhouseCooper is the bid manager.
This came after earlier failed attempts -- through open biddings and a stalking-horse bid -- to sell the troubled firm since Changwon District Court placed the firm under court receivership in April 2018. It is owned by creditors including Export-Import Bank of Korea, NongHyup Bank and Korea Trade Insurance Corp.
Earlier in September, Sungdong managed to extend a deadline for bankruptcy order to December this year. The court approved Sungdong’s plan to repay its debts, using the proceeds from the sell-off before the deadline, as well as the 110.7 billion won proceeds from a shipyard selloff to Hyundai Development in 2017.
Once the 10th-largest shipbuilder in the world by global orders, Sungdong fell from grace in 2008 suffering lack of liquidity and order cancellations. The company went in the hands of creditors in 2010.
As of end-2018, Sungdong’s liabilities came to 2.7 trillion won, far exceeding that of its assets of 939.4 billion won. Also in 2018, It recorded 33.3 billion won operating loss and secured no orders.
By Son Ji-hyoung (firstname.lastname@example.org)