South Korea’s STX Corp has confirmed that it will sell a minority stake in its STX Energy subsidiary to Japan’s Orix for 360.1 billion won (US$329.92m).
Under the terms of the agreement, STX Group will sell existing and new shares in STX Energy to Orix and also issue convertible bonds to the Japanese company to give the latter a 43.1% interest. STX had selected Orix as its preferred bidder for the stake in September.
STX Group and its affiliates currently own 91% of STX Energy, with the rest held by minority shareholders, so the Korean company will still retain management control of its power-generation and petroleum-distribution arm, which made a KRW66.3bn profit on a turnover of KRW1.02 trillion last year.
The decision to sell the stake was driven by the STX group’s need to strengthen its balance sheet. The company is also planning to merge two other units, STX Metal and STX Heavy Industries, and divest other non-core assets.