POSCO Plantec on Tuesday decided to submit workout plans to its creditors, the company said on Tuesday.
The main creditor, the Korea Development Bank, will decide whether to approve the plans early June.
If the plans are rejected, and the parent company declines to inject more funds into the unit, POSCO Plantec will become POSCO’s second subsidiary in its 47-year history to be put under court supervision.
The plant parts unit also confirmed that about 89.2 billion won ($81.2 million) of its loans is currently in arrears.
POSCO Plantec has suffered from continued losses since acquiring Sungjin Geotec in 2010 ― which it merged with two years ago.
The company posted a 72.1 billion won net loss in the first quarter, following a 279.7 billion won loss last year.
POSCO is reviewing plans to shut down Plantec’s manufacturing facility in Ulsan, which will leave the steelmaker with a total of 520 billion won in losses from investment in the parts unit over the past five years.
POS-HiAL, an alumina supplier which filed for court receivership last month, was the first POSCO affiliate to do so.
