STX Engine, a listed diesel engine manufacturer, said in its regulatory filing that it is considering selling its communication equipment business as part of its debt restructuring.
“The company has been in talks with its creditors (led by state-run Korea Development Bank) regarding the possible sale of the communication equipment unit as part of its self-rehabilitation plan,” STX Engine said in a disclosure filing.
STX Engine has been in a creditor-led debt workout since September 2013 following STX Group’s liquidity crunch amid the global economic slowdown, which has weighed down the group’s core shipbuilding and shipping businesses.
STX Engine’s communication equipment for the Korean military accounts for about 10 percent of the company’s total sales. Its main business is manufacturing engines for ships and power plants, according to its financial report.
It had revenue of 633.3 billion won ($542.7 million) in fiscal 2015, down from 711 billion won a year ago. It made a turnaround with profit reaching 36.4 billion won last year, from a loss of 74 billion won.
The company said it would further disclose on the sale of the communication business in six months. KDB has more than a 40 percent stake in STX Engine.
By Park Hyong-ki (hkp@heraldcorp.com)