STX’s attempt to rebuild confidence has suffered a fresh blow after a key export contract to Peru was cancelled, underscoring how fragile the trading company’s position has become as it moves through rehabilitation proceedings. According to Biz Chosun, the deal involved supplying armoured vehicles for export and had been one of the few sizeable projects left on the company’s books.

The contract, signed in 2024, was worth about 80 billion won and represented roughly a tenth of STX’s sales at the time, the company said. But the Peruvian counterparty terminated the agreement after concluding that STX, now in corporate rehabilitation, no longer had the capacity to carry it out. Daum reported that the move has deepened concern over the company’s future business continuity.

The cancellation is particularly damaging because the Peru order had previously been used to justify legal relief for STX in its dispute with South Korean financial regulators. Last year, the Securities and Futures Commission found that STX and its former subsidiary STX Marine Service had breached accounting standards by failing to reflect litigation-related risks in their financial statements, prompting sanctions and a trading suspension. STX disputed the findings and sought to suspend the effect of the penalties, and the court accepted that request in part after citing the risk that the Peru deal could collapse if the sanctions took effect.

That argument has now weakened. After STX entered rehabilitation proceedings in December, the Peruvian buyer moved to terminate the contract, even though STX had said the insolvency process would not affect performance. On 23 April, financial authorities imposed further sanctions, and Yonhap reported that the Financial Services Commission later levied combined fines of 3.66 billion won on STX and STX Marine Service over accounting violations, while referring four executives for prosecution. An industry official told Biz Chosun that STX’s difficulties reflect the shrinking role of general trading houses as manufacturers increasingly build their own overseas sales networks.

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Source: Noah Wire Services