In the latest sign of its deteriorating financial status, STX Offshore & Shipbuilding Co., a South Korean shipbuilder, said Tuesday that it has submitted a voluntary debt-rescheduling plan to its creditors as part of efforts to receive fresh loans.

STX Offshore, the shipbuilding unit of STX Group, a South Korean shipping and shipbuilding conglomerate, has been suffering a credit crunch as demand for new ships has fallen sharply in the past few years.

"STX Offshore & Shipbuilding will closely consult with the creditors led by Korea Development Bank, and will carry out self-rescue plans such as asset sales after the creditors accept our proposal," it said in a statement. STX Offshore logged a net loss of 782 billion won on a consolidated basis last year, and suffered an operating loss of 403 billion won as well.

Its debt reached 12.2 trillion won at the end of last year on a consolidated basis, up 500 billion won from a year earlier.

STX Group has been seeking to sell units and affiliates as part of efforts to secure cash, thus putting its balance sheet in good shape. Its shipping unit, STX Pan Ocean Co., is also on the selling list.

In December, the group signed a deal to sell its stake in its European shipbuilding unit STX OSV Holdings Ltd. to an Italian firm to ease the group's credit crunch. STX Group said earlier it secured a total of 768 billion won (US$691 million) through the sale.

Also, the group sold its energy unit to Orix Corp. of Japan for some 360 billion won last year.

But the group's shipping line STX Pan Ocean Co. failed to draw buyers for a 36 percent stake last week. The country's leading bulk carrier has faced a slump in freight rates.

Shares of STX Offshore had dropped by the daily limit of 15 percent to 5,160 won on the Seoul bourse as of 2:34 p.m.

Source: Yonhap