STX Offshore & Shipbuilding Co. and its union have submitted a package of self-rescue measures to the state-run Korea Development Bank, a breakthrough that could keep the financially troubled midsize shipbuilder afloat.
The two sides reached a deal on restructuring measures, hours after creditors, led by the KDB, said they will place the debt-ridden shipbuilder under court receivership.
Before the deadline that expired at midnight Monday, creditors said that they can issue refund guarantees for new ships and keep the company in operation if STX Offshore’s management and union agree on a package that includes a 75 percent job reduction.
The deal is subject to approval from the KDB.
“I hope that the Korea Development Bank will accept the agreement,” STX Offshore’s CEO Jang Yoon-geun said after submitting the self-rescue measures and a written pledge to carry them out.
Jang also said “it is our job to weather the difficulties, as management and union made a difficult decision.”
The KDB said it will quickly decide whether to accept the self-rescue measures by reviewing them and holding consultations with relevant parties.
A senior union official said the written pledge reached between management and union calls for both sides to share the pains of the self-rescue package, such as unpaid leave.
The company and union did not disclose the written pledge.
STX Offshore, once the world’s fourth-biggest shipbuilder by orders, was placed under court receivership in 2016 and graduated from the program in July 2017.
South Korean shipbuilders have been struggling with declining orders amid a global economic slowdown after they were hit hard by the 2008 financial crisis.