SeAH STX Entech, which is undergoing corporate rehabilitation (formerly court receivership), failed to find a new owner and entered the liquidation process. SeAH STX Entech, facing a liquidity crisis, applied for corporate rehabilitation in Jul. last year.
According to the investment banking (IB) industry on the 6th, the Seoul Bankruptcy Court recently decided to discontinue the rehabilitation proceedings for SeAH STX Entech, saying it was clearly revealed that liquidation value exceeded going-concern value.
With this decision, SeAH STX Entech will proceed with liquidation. SeAH STX Entech, due to accumulated losses, applied to the court for corporate rehabilitation in Jul. last year. It then pursued a merger and acquisition (M&A) before approval of a rehabilitation plan, but was said to have failed to find a buyer. The court extended the deadline for submitting the rehabilitation plan multiple times, but SeAH STX Entech was reported not to have submitted the plan.
SeAH STX Entech is the successor to the plant business institutional sector of STX Heavy Industries and was incorporated into Global Sae-A in Jul. 2018. It focuses on engineering, procurement and construction (EPC) for chemical equipment plants in the environment and power sectors. At the time, Global Sae-A acquired 100% equity of the plant business institutional sector of STX Heavy Industries, which was undergoing corporate rehabilitation, to enter the construction business.
SeAH STX Entech fell into a liquidity crisis in 2022 as construction raw material prices surged with the outbreak of the war in Ukraine. As the launch of new projects was also delayed, profitability deteriorated sharply. SeAH STX Entech posted revenue of 264.4 billion won and a net loss of 103.4 billion won in 2022. In 2023, it recorded revenue of 205.3 billion won and an operating loss of 35.3 billion won, marking a second straight year of losses.
Most of SeAH STX Entech's creditors are affiliates of Global Sae-A Group. SeAH STX Entech's total borrowing fund is 131.8 billion won, with more than 80% of the total borrowed from related companies such as Global Sae-A, Sae-A Trading, and Tailim Paper. Chair Kim Woong-ki also contributed 45.5 billion won of personal funds. In SeAH STX Entech's liquidation, only part of the borrowing fund is expected to be repaid.