KSOE joins race to buy marine engine maker STX Heavy Industries

Korea Shipbuilding & Offshore Engineering Co. (KSOE) has joined the race to acquire South Korean marine engine and equipment maker STX Heavy Industries Co., according to industry sources on Dec. 15.

Pine Tree Partners LLC, a local private equity firm and the largest shareholder of STX is set to sell its entire 48% stake in the company. 

The PE firm and KPMG Samjong Accounting Corp. closed a preliminary bid on Dec. 14. KSOE, the intermediate shipbuilding holding company of the Hyundai Heavy Industries Group, HSD Engine Co., formerly Doosan Engine, and an overseas company participated in the bidding.

Hyundai Heavy Industries Group expects to create a synergy effect with STX by boosting small and mid-sized marine engines and diversifying product lines, as well as effectively responding to increasing demand for marine engines in the global market, a group official said.

Pine Tree Partners acquired a 66.1% stake in STX for 98.7 billion won ($75.1 million) by purchasing new shares and corporate bonds in 2018.

The PE firm has reduced the shareholding rate through block deals, over-the-counter transactions with a large number of securities, and trading on the stock exchange.

STX, listed on the main bourse Kospi, posted 169.3 billion won in revenue and 10.9 billion won in operating losses last year. From January to September of this year, it had 132.1 billion won in revenue and 32 billion won in operating profit. Last month, the company announced that it signed a contract to supply marine engines worth 13.9 billion won to a Chinese shipbuilder.

STX shares closed at 5,760 won on Thursday, up 12.28%.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jihyun Kim edited this article.