(Bloomberg) — STX Pan Ocean Co., South Korea’s largest commodities-shipping company, slumped to the lowest level in Seoul trading since its listing after a court accepted its application to seek protection.
Pan Ocean fell by its daily 15 percent limit to 2,185 won, the lowest price since September 2007, when it debuted on the Korea Exchange. Trading in the shares had been halted since June 6, and the company filed for court receivership the next day. The stock was the worst performer on the benchmark Kospi index today.
“This is only the start of more pain for Pan Ocean and other units of STX Group,” said Cho Byoung Hee, an analyst at Kiwoom Securities Co. in Seoul. “The court’s acceptance will mean investors will see their equity written down and creditors will swap debt for equity as part of the restructuring plan.”
The shipping company sought court receivership after Korea Development Bank, the main creditor and Pan Ocean’s second- biggest shareholder, decided against buying the company from STX Group. The parent has been trying to raise 2.5 trillion won ($2.2 billion) by selling stakes in units as a slump in bulk shipping rates caused ship orders to tumble.
STX Offshore and two other units of the STX Group had voluntarily sought debt rescheduling with their creditors.
– Kyunghee Park, Copyright 2013 Bloomberg.