Shares of STX Group subsidiaries rebounded for a second day on Tuesday upon news that STX Heavy Industries will receive early payments for its construction project in Iraq which are expected to ease the conglomerate’s financial troubles.

STX Heavy Industries is set to receive more than 700 billion won ($601 million) about a month earlier than previously scheduled for the construction of a diesel power plant in Iraq, according to company officials.

About $384 million will be wired from Standard Chartered Korea Financial Group early this week, and another 300 billion won will be wired early next month, an STX official said.

Shares of STX Pan Ocean, STX Offshore and Shipbuilding and STX Metal climbed 6.74 percent, 3.5 percent and 3.46 percent, respectively, on Tuesday.
STX Heavy Industries signed a deal with the Iraqi government in May last year for the 1-trillion-won project to build a 2,500-megawatt diesel power plant, and received a down payment of 170 billion won.

Once the power plant is completed next month, STX will receive the remaining 130 billion won.

The conglomerate also expects to sell its 50.75-percent stake in offshore vessel maker STX OSV Holdings Ltd. at around 900 billion won.

Shares of STX subsidiaries had plummeted last Thursday on rumors that the conglomerate received payments for its sale of STX OSV in advance due to deepening financial woes.

STX Group on Thursday denied the rumor and said the sale process of the world’s biggest maker of offshore support vessels is going well as are talks with main creditor Korea Development Bank.

The group also reiterated that it intends to raise a total of 2.5 trillion won through the sale of assets including its stake in STX OSV and an overseas resources project.

A consortium of Fincantieri SpA, an Italian state-controlled shipbuilder, and Carlyle Group has reportedly been chosen as the preferred bidder for a stake in STX OSV.

STX said in response to an inquiry from the Korean Exchange on Thursday that it was discussing plans to directly list STX Energy and STX Heavy Industries or to sell off assets through the establishment of a special purpose company with the KDB to improve its financial health. The company said, however, that nothing has been decided yet.

By Kim So-hyun (sophie@heraldcorp.com)