Former STX Shipyard For Sale as Investors Seek to Cash Out After Turnaround

 

Once one of the leading shipbuilders in South Korea, the former STX Yard, which was relaunched as K Shipbuilding, is celebrating a remarkable turnaround. According to a report in The Korean Economic Daily, after having posted its first profit in 14 years, the investment group with revived the shipbuilder is now looking to cash out.

KHI Investment and United Asset Management Company (UAMCO), South Korea's biggest bad debt investor, took control of the troubled shipbuilder in 2021, paying more than $180 million for the company. Timing was ideal as shipbuilding was entering a strong upcycle, and although they were a smaller mid-sized yard, the business, renamed K Shipbuilding, was able to grow quickly.

The investment group believes that despite the slowing in orders, it is still a good time to cash out with the news report saying they are seeking as much as $732 million for the company. As part of the sale, KED reports that UAMCO also seeks a debt refinancing of more than $100 million in financing provided to restore K Shipbuilding. The investors have also decided to exclude bids from foreign private equity investors instead seeking a Korean buyer for the company, which it views as a strategic asset for Korea.

STX was a thriving company with 1,500 employees in Korea in 2017, shortly before it collapsed. It had grown quickly, adding international operations, but suffered badly from the downturn in shipbuilding at the end of the 2000s and into the 2010s. After a series of refinancing and asset sales, STX went into receivership in 2016. 

The Korean Economic Daily reports that the company last year posted its first profit in 14 years. The forecast is that the yard could exceed 1 trillion won ($735 million) in revenues in 2025. It would be the first time the company has reached those levels since 2019.

The Korean shipbuilding looks to new emerging opportunities as the Trump administration looks to counter China’s dominance of shipbuilding. Last year, Hanwha Ocean also broke into the U.S. Navy repair sector, and reports are that Korea’s midsized shipbuilders are looking to follow, also bidding for U.S. Navy projects.

In addition to its investment in K Shipbuilding, KHI also joined an investor consortium that acquired another midship shipbuilder, Daehan Shipbuilding. Like STX, it had fallen on hard times and went through more than a decade of debt refinancing. KHI is the last remaining investor, and it has announced plans for Daehan to go public on the Korean Stock Exchange later this month.