DSME mulls acquisition of STX cruise ship builder

Daewoo Shipbuilding and Marine Engineering is reviewing plans to acquire the defunct STX Group’s French cruise-ship maker.

According to news reports, DSME was planning to acquire a two-thirds stake in STX France.

The company, however, downplayed the reports, saying that the plans were in their early stages.

“The company has received a proposal regarding the acquisition of STX France, (but) so far nothing has been decided,” the company said in the statement.

STX France is a subsidiary of STX Offshore and Shipbuilding, owned through two European subsidiaries of STX.

The stake linked to DSME is held by STX Europe, with the remainder held by the French government.

Since the Korean shipbuilding conglomerate was dismantled, the French government has been eager to find a new majority shareholder. As the initial target of finding a new owner by the end of last year fell through, the French government criticized the Korea Development Bank, STX Group’s main creditor.

While DSME appears cautious in being linked to STX France, the recent appointment of Jung Sung-leep as its new chief is adding credibility to related reports.

Although Jung began his career at Daewoo, he has until recently headed STX Offshore and Shipbuilding, where he was spearheading the efforts to normalize the company.

Following Jung’s appointment to his new post, speculation rose that DSME may effectively merge with STX companies.

In addition, the prospect of acquiring STX France’s cruise ship business to DSME’s commercial and military portfolio may nudge the company toward following through on the proposal.

However, some observers are doubtful, pointing to DSME’s limited liquidity.

According to industry data, DSME’s cash reserves fell to 138.7 billion won in 2014 from 382.9 billion won the previous year.

By Suk Gee-hyun (monicasuk@heraldcorp.com)