STX Pan Ocean faces mounting liquidity crisis, files for receivershipSOUTH Korea's central district court will soon decide whether to go ahead with a reorganisation of the South Korean shipping group STX Pan Ocean which filed for court receivership after failing to receive emergency funding from its main creditor, the Korea Development Bank (KDB).
The company is facing a liquidity crisis due to mounting debts and losses that stem from falling freight rates and an oversupply of ships in line with the global economic slump. As at the end of March 2013, the company operated a total fleet of 346 vessels for 23.13 million dwt and with a dry bulk fleet of 279 vessels, and remains one of the largest dry bulk shipping operators in the world, reports Alphaliner.
STX Pan Ocean's container shipping operations are more modest, accounting for 15 per cent of the group's total revenue of US$4.8 billion in 2012. It operated a fleet of 25 container vessels ranging from 350 to 4,400 TEU at the end of March, of which seven ships of between 700 and 2,700 TEU are owned.
STX took delivery of one 1,815-TEU newbuilding in May with another sistership due before the end of the year. It had put several of its owned containerships for sale, including the two newbuildings, but they have so far been unsuccessful in securing any buyers. Its container shipping operations have consistently underperformed, with only one profitable year out of the last 11.
It will be the second time that STX Pan Ocean is placed under court receivership. Pan Ocean Shipping was placed under court receivership in December 1993 after failing to meet its debt burden as a result of its expansion.
It was reorganised following a court-approved corporate reorganisation plan and emerged from receivership only in November 2004 when a consortium of companies affiliated with STX Corp acquired 67 per cent of its shares via an auction led by KDB, which was one of its major creditor shareholders. The company was then renamed STX Pan Ocean.
The company is facing a liquidity crisis due to mounting debts and losses that stem from falling freight rates and an oversupply of ships in line with the global economic slump. As at the end of March 2013, the company operated a total fleet of 346 vessels for 23.13 million dwt and with a dry bulk fleet of 279 vessels, and remains one of the largest dry bulk shipping operators in the world, reports Alphaliner.
STX Pan Ocean's container shipping operations are more modest, accounting for 15 per cent of the group's total revenue of US$4.8 billion in 2012. It operated a fleet of 25 container vessels ranging from 350 to 4,400 TEU at the end of March, of which seven ships of between 700 and 2,700 TEU are owned.
STX took delivery of one 1,815-TEU newbuilding in May with another sistership due before the end of the year. It had put several of its owned containerships for sale, including the two newbuildings, but they have so far been unsuccessful in securing any buyers. Its container shipping operations have consistently underperformed, with only one profitable year out of the last 11.
It will be the second time that STX Pan Ocean is placed under court receivership. Pan Ocean Shipping was placed under court receivership in December 1993 after failing to meet its debt burden as a result of its expansion.
It was reorganised following a court-approved corporate reorganisation plan and emerged from receivership only in November 2004 when a consortium of companies affiliated with STX Corp acquired 67 per cent of its shares via an auction led by KDB, which was one of its major creditor shareholders. The company was then renamed STX Pan Ocean.