Samra Midas Group, or SM Group, has no intention to acquire part of midsized shipyard SPP Shipbuilding from its creditors, a local news report said Thursday.

The business group, which owns listed shipper Korea Line and builder Woobang Construction, could not narrow differences in the price negotiation for SPP’s shipyard in Sacheon, Yonhap said. 


“We had estimated that additional 140 billion won ($118 million) would be needed for SPP Shipbuilding based on the result of due diligence. But creditors did not budge on the additional price negotiation,” Yonhap quoted an unnamed source from SM Group as saying.

Leading creditor Woori Bank’s spokesman Lee Tae-je said the deal has not been terminated yet, saying one day is still left for SM Group to officially notify their stance.

If SM Group completely walks away from the deal, creditors are likely to seek to auction the shipbuilder again, rather than have the company apply for court receivership.

“Even if the deal negotiation falters, creditor banks will not have the company apply for court receivership because the shipbuilder is producing operating profits and has enough cash to build ships,” Lee said.

SM Group had signed a memorandum of understanding with creditors to acquire SPP’s Sacheon shipyard, one of the three shipyards of SPP Shipbuilding, in South Gyeongsang Province.

Industry sources speculated that SM Group would have wanted to pay about 400 billion won for the shipbuilder.

SPP Shipbuilding began a creditor-led debt restructuring program in May 2010, after its losses mounted to 1.2 trillion won, including 800 billion won in derivatives investment losses.

Export-Import Bank of Korea holds a 46 percent stake in the shipbuilder, Woori has 29 percent and Korea Trade Insurance Corp. with 20 percent, according to Woori Bank.

SPP Shipbuilding posted a 56.6 billion won operating profit on sales of 1.5 trillion won in 2015.

By Kim Yoon-mi (yoonmi@heraldcorp.com)