Samla Midas Group, or SM Group, is nearing a deal to take over one of the three dockyards of SPP Shipbuilding, as it has reached an agreement with the ailing shipbuilder’s creditor banks to clear a key hurdle in the acquisition, local news reports said Wednesday.
SM Group, which owns shipper Korea Line Corp., had been selected early this year as the preferred bidder for SPP’s yard in Sacheon, South Gyeongsang Province, but SPP’s creditor banks, led by Woori Bank, refused to issue refund guarantees to the group, which are essential for new shipbuilding orders.
A refund guarantee by banks assures buyers that their money, paid to a shipbuilder when an order is placed, will be returned if the yard fails to deliver.
As of Wednesday, SPP’s creditors agreed to SM Group to grant refund guarantees for three years following the acquisition, for up to 40 ships, local news reports said.
SPP Shipbuilding has been under creditor-led debt workout since May 2010. Its creditors injected 600 billion won ($517 million) cash until 2014, and an additional 483 billion won in March last year.
By Kim Yoon-mi
(yoonmi@heraldcorp.com)