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Kang Duck-soo |
Kang Duck-soo, 63, chairman and founder of STX Group, the nation’s 13th-largest conglomerate by assets, is facing his biggest-ever crisis as some of the company’s major affiliates are suffering from financial crunches.
Cornered by liquidity problems, Kang has handed over his controlling stakes in STX Offshore & Shipbuilding, a core affiliate of STX Group, to creditors.
“His decision came amid creditors’ due diligence on the group’s money-losing shipbuilding unit before the creditors decide whether or not to inject an emergency fund,” said an official from Korea Development Bank, the main creditor. STX Offshore asked creditors for financial support early this month to repay maturing debt.
Kang controlled a 30.6 percent stake of STX Offshore & Shipbuilding, using his 9.9 percent stake in STX Corp., the de facto holding company of the group.
Industry watchers said Kang’s move reflects the fact that the nation’s shipbuilding and shipping giant is on the brink of bankruptcy.
Twelve years after the group was founded in 2001, the future of Kang and his group depends on the decision of creditors. Besides STX Offshore & Shipbuilding, KDB also reviews the possible acquisition of shipping company STX Pan Ocean, another core affiliate of STX Group, at the request of the group.
Salary worker-turned-business group chairman Kang has been an icon of success for corporate employees in Korea. Back in 2001, Kang, chief financial official of Ssangyong Heavy Industries, took over the company by leveraging his personal wealth worth 2 billon won ($1.8 million) and renamed the company STX Group. He transformed the company into a shipbuilding and shipping giant by sealing several inbound and outbound merger and acquisition deals by the mid-2000s.
STX Group’s business declined with the 2008 global financial crisis. The group took a blow amid falling shipbuilding orders and reduced demand for marine transportation, coupled with a lack of risk management in external expansion, leading to a liquidity crisis.
As of the end of 2012, sales of STX Group posted 18.8 trillion won ($16.2 billion) but its debt rose to 17.9 trillion won, according to the Fair Trade Commission.
By Seo Jee-yeon (
jyseo@heraldcorop.com)
