Following the fate of its parent company STX Offshore & Shipbuilding Co., South Gyeongsang-based Goseong Offshore & Shipbuilding is expected to head for court receivership early next month amid massive losses that have mounted up over the past two years.

According to multiple sources from the shipbuilding industry and the financial circle on Thursday, creditors and STX Offshore & Shipbuilding have decided to put Goseong Offshore & Shipbuilding under court management early next month and have begun taking necessary steps. The decision has been made after judging that it would be difficult for the small shipbuilder to sustain after its parent company goes under although its order backlog is sufficient to maintain operations until the end of next year.

Goseong Offshore & Shipbuilding, which was founded in 1978, went under STX Offshore & Shipbuilding in March 2011. Based in Goseong County, South Gyeongsang, the dockyard is composed of a floating dry dock with a length of 430 meters spanning over 514,139 square meters. As an STX affiliate, the shipbuilder specialized in building oil and container tankers based on the four 900-ton gantry cranes. Currently, about 2,470 employees work for Goseong Offshore & Shipbuilding including those from partnering firms. It has about 50 subcontractors.

Industry sources note that the financial health of STX Offshore & Shipbuilding deteriorated when it offered cheap rates to keep orders flowing in to appear active while under creditor-led management since 2013. It expansion of the Goseong shipyard to meet the orders worsened the balance sheet.

Goseong Offshore & Shipbuilding has hopes that its dockyard has a better chance than its parent company to be salvaged by the court as it has been upgraded to block-assembling facility.

As part of efforts to minimize the damage, creditors and STX Offshore & Shipbuilding will demand court order for comprehensive injunction to assets for the shipbuilder. STX Offshore & Shipbuilding will continue with sale of its other affiliate STX France.

By Park Yong-beom, Chung Seok-woo

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