SEOUL, KOREA - STX Dalian Shipbuilding, a subsidiary of Korea's STX Offshore & Shipbuilding, will soon file for court receivership with the Chinese court. An official of Korea Development Bank, the principal creditor bank of STX Group, said, "Court receivership is the only way to keep STX Dalian alive. We are reviewing options for apply for it."

 

STX Group's Chinese unit has borrowed in excess of 1 trillion won from Chinese financial institutions. The company stopped its operations early last year when it fell into financial difficulties at the same time as the parent company in Korea. But it is not clear when the Chinese court would approve the court receivership application. Last year the company tried the same in vain.

 

The Korea Development Bank official added, "Usually the Korean court tend to approve the application. But it remains to be seen how the Chinese court does because there are many differences in legal practices and requirements." If the Chinese court rejects the application, STX Dalian may have to file for bankruptcy.