Woori Bank has reportedly notified and gained approval from financial regulators and other creditors of STX Corp. to unload and sell-off its equities of STX and ForceTec Woori received as collateral for loans extended to ForceTec.
The conglomerate’s chairman Kang Duk-soo, whose key subsidiaries such as shipping and shipbuilding are teetering on the edge of bankruptcy due to the debt overhang, had put up his equity ownerships of about 11 percent in STX and its de facto IT and logistics parent ForceTec for loan by Woori Bank.
Woori Bank’s planned liquidation of the shares before STX’s creditor-led workout program will unwind and disband equity links among STX subsidiaries. Kang is also expected to lose his ownership of the group.
Kang held a controlling interest in ForceTec, which owned a majority stake in STX. The group held stakes in key subsidiaries ― STX Pan Ocean, STX Heavy Industries, STX Engine and STX Offshore & Shipbuilding.
Woori Bank seemingly seeks to redeem some of its loans extended to Kang for his group through the stake sale before STX share prices further dilute by capital reduction and debt to equity conversion planned under the creditor-led workout program.
STX’s share price has been spiraling downward rapidly, falling to 2,560 won as of last Friday, from 8,000 won early this year.
Creditor-banks led by Korea Development Bank agreed to bailout STX, meaning that the group’s normalization process is in the hands of those banks.
Woori’s equity liquidation would be one of the first steps that would lead up to breaking up the group and selling some of its subsidiaries as a separate entity to potential buyers after creditor banks improve their finances, while others will be put through court receivership.
KDB-led creditors previously noted that their priority was speeding up normalization of the companies, not helping maintain the governance structure of STX, indicating that chairman Kang will no longer be in charge of the group.
By Park Hyong-ki (
hkp@heraldcorp.com)
