Daewoo Shipbuilding & Marine Engineering has put its plans to acquire STX France on the back burner, the shipbuilder’s CEO Jung Sung-leep said Thursday.
DSME CEO Jung Sung-leep. DSME
DSME had considered acquiring 66 percent stake in STX France upon request by its largest shareholder, state-run Korea Development Bank.
KDB, which is also STX Group’s main creditor, has been pushing to sell off STX France and STX Finland as part of its efforts to restructure the defunct shipbuilding conglomerate.
Speaking at a news conference, Jung said that the issue has been put on hold while leaving the possibility of entering the cruise ship market open.
“For now the file on STX France acquisition has been closed, (the company) judged that this is not the time to consider a takeover,” he said. Adding that in light of DSME’s performance so far this year, there would be “many negative influences” from going ahead with the takeover, and that the labor union is also against the move.
“For the future, it is clear that the cruise ship business is definitely a direction DSME needs to take. (The present) is too early, but it is a business (DSME) needs to enter at some time.”
Despite the decision, the DSME CEO said that STX France is a solid company with a positive outlook.
Having visited STX France’s facilities, Jung said he is aware that the shipyard is far from unstable and that it was clear that the smaller company is highly capable in building cruise ships.
Although Jung’s ties to STX Group, and the fact that acquiring STX France would widen DSME’s portfolio had fueled speculation about a successful acquisition, market observers had expressed doubts given DSME’s limited liquidity.
Jung began his career at Daewoo but until recently he headed STX Offshore and Shipbuilding, where he was spearheading efforts to normalize the company.
According to industry data, DSME’s cash reserves fell to 138.7 billion won in 2014 from 382.9 billion won the previous year.
By Suk Gee-hyun (
monicasuk@heraldcorp.com)