Sungdong Shipbuilding averts liquidation with W200b deal

A consortium led by HSG Heavy Industries signed a contract Tuesday to buy debt-saddled South Korean shipbuilder Sungdong Shipbuilding & Marine Engineering for 200 billion won ($173 million), allowing the shipbuilder to avert liquidation of its assets.

So far the consortium has paid 10 percent of the total, with the balance due by February.

This came a month after the consortium, composed of HSG Heavy and private equity firm Curious Partners, was chosen as the preferred bidder for the Tongyeong-based shipyard, which has been under court receivership by the Changwon District Court since April 2018.

It was the fourth attempt at a sale, after three previous failed efforts through open biddings and a stalking-horse bid. If the deal had ended in failure by Tuesday, creditors would have initiated insolvency.

Once the 10th-largest shipbuilder in the world by global orders, Sungdong fell from grace in 2008 due to the financial crisis and order cancellations. In 2010, the company was handed over to creditors including the Export-Import Bank of Korea, NongHyup Bank and the Korea Trade Insurance Corp.

As of end-2018, Sungdong Shipbuilding recorded a 33.3 billion won operating loss and secured no orders, while its liabilities came to 2.7 trillion won.

By Son Ji-hyoung (consnow@heraldcorp.com)