STX Dalian goes unsold at first auction

The first auction of six subsidiaries of the STX Dalian Group, the bankrupt subsidiary of South Korea’s STX Corporation, was called off on 12 May after failing to find a bidder.

The assets of the companies – STX (Dalian Shipbuilding), STX (Dalian) Heavy Industries, STX (Dalian) Marine Engineering, STX (Dalian Engine), STX (Dalian) Plant, and STX (Dalian) Metal – were to be auctioned as a whole, with a total valuation of CNY5.8 billion (USD948 million).

The auction was to be conducted by both Shanghai International Commodity Auction and Beijing Yatelan International Auction.

However, only 36.9% of creditors, in terms of the amount of unsecured debts, agreed to the auction, a close source told IHS Maritime.

Suppliers protested in front of the Dalian Intermediate Court on 12 May, where the auction was held, before being informed by the judge that the sale had fallen through.

In accordance with relevant auction regulations, the asking price at the second auction could be reduced by 20%.

According to the source, the first two auctions will fail and Dalian Shipbuilding Industry Company, which is owned by the China Shipbuilding Industry Corporation, will take over STX Dalian for less than CNY4 billion.

Apart from STX (Dalian) Metal, total liabilities of the other five companies amounted to CNY35.1 billion, according to documents released by the bankruptcy trustee in March. If the auction is successful, it will still be impossible to repay most creditors.

STX Dalian Group failed to complete bankruptcy reorganisation and went into liquidation in March.

STX Dalian was established in 2007, with a registered capital of USD1.125 billion, and employed over 20,000 people at its peak.

This post was sourced from IHS Maritime 360: View the original article here.