Bloomberg News

STX Group Units Tumble in Seoul Trading on Fundraising Concern

October 20, 2011

Oct. 21 (Bloomberg) -- STX Pan Ocean Co., South Korea’s largest bulk-shipping line, fell by as much as the daily limit in Seoul trading and affiliates tumbled on speculation group companies may sell stock to help pay debt.

“There were rumors about the group planning to sell shares and bonds because they may be short of funds,” said Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul. Um said STX officials told her the rumors were untrue. No one was immediately available for comment when Bloomberg News called STX Group’s media relations office today.

STX Pan Ocean dropped as much as 15 percent and was down 7.6 percent to 6,840 won at 11:22 a.m. on the Korea exchange. STX Offshore & Shipbuilding Co. lost as much as 11 percent and STX Corp. fell as much as 12 percent. The benchmark Kospi Index rose 1.3 percent.

The three companies and STX Engine Co. have 1.45 trillion won ($1.3 billion) of debt and loans due before the end of next year, according to data compiled by Bloomberg. Seoul-based STX Pan Ocean, the largest of the group companies by market capitalization, had a first-half loss of $27.7 million as overcapacity in the global commodity-shipping fleet depressed rates.

In Singapore trading, STX Pan Ocean fell as much as 10 percent, the largest intraday drop since March 2010, and STX OSV Holdings Ltd., which makes oil-rig support vessels, declined as much as 9.3 percent. STX Engine dropped as much as 15 percent in Seoul.

--Editors: Neil Denslow, Lena Lee

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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