POSCO Plantec Co., a unit of South Korea's top steelmaker POSCO, said Tuesday it decided to apply for a debt-restructuring program in an effort to tide over a cash crunch.

The decision to request the workout program to its creditors, led by the Korea Development Bank, was made during a board meeting, POSCO Plantec said in a regulatory filing.

By law, creditors who hold more than 75 percent of debt owed by POSCO Plantec are required to give the okay to the workout plan.

The plant parts maker said that its overdue loan payments totaled 89.2 billion won ($81.08 million) as of Tuesday.

Shares of the company closed at 1,295 won on the local bourse on Tuesday, up 5.28 percent from the previous trading session.

POSCO Plantec has been struggling in the red for the last two years amid an overall slump in the shipbuilding and other maritime industries. Last year, the company posted an operating loss of 189.1 billion won.

POSCO and its construction arm, POSCO Engineering and Construction Co., had injected 290 billion won late last year into the cash-strapped affiliate via paid-in capital contributions.

The latest workout request marks the first time for a POSCO affiliate to apply for a debt-restructuring scheme, but the conglomerate, which is currently carrying out measures to boost financial soundness, said additional funding for its ailing unit is unlikely at the moment.

"Additional financial support for POSCO Plantec, which has been suggested by some, is difficult," a POSCO official said.

"Considering the current situation in which it is unclear whether financial firms and lenders are willing to cooperate, extra funding in the short term may go against the interests of POSCO's shareholders." (Yonhap)