STX denies report of Iraqi deal's possible breakdown

SEOUL, Aug. 8 (Yonhap) -- STX Group, a South Korean shipbuilding and shipping conglomerate, said Monday that the US$2.75 billion deal with the Iraqi government would go ahead smoothly, denying a media report that the deal may fall through over contract terms.
STX Heavy Industries Co. signed a deal with Iraq's electricity ministry in May this year to build 25 power plants across the Middle Eastern nation that will generate a combined 2,500 megawatts. The diesel-fired plants will be built by June 2012, the company said earlier.
But Reuters reported on Sunday that the Iraqi electricity ministry asked the Iraqi cabinet to rule on the contract, saying STX Heavy was at risk of missing a deadline to meet one of its contract terms.
The ministry also said the South Korean company should find a third party financial guarantor within three months, a condition of its contract, according to the report.
"It (finding a third party financial guarantor) is not stipulated in the contract," said an official at STX Corp., the group's de-facto company. "We will continue to cooperate with the Iraqi government to complete the project."
sam@yna.co.kr