South Korean shipbuilder STX Offshore & Shipbuilding Co. is likely to receive a financial aid from its creditors worth KRW 450 billion (USD 385 million) in exchange for a massive cut in workforce, Yonhap news agency reports.
The creditors, led by the state-run Korea Development Bank (KDB), are to meet this Wednesday when they should decide whether to save the shipbuilder from a liquidity shortage.
The potential lifeline would cost the labor union some 800 jobs, or 30 percent of the shipbuilder’s workforce by the end of 2016.
The company, once the world’s fourth biggest shipbuilder, has been under control of its creditors for two years now having compiled a debt of USD 3.5 billion amid a prolonged industry slump.
STX aims at abandoning its offshore and special ship business, which will turn the company, into a medium-sized enterprise focusing entirely on the construction of tankers.