KDB to find a new owner of Daewoo Shipbuilding

Korea Development Bank (KDB) said Wednesday it began efforts to find a new owner of the world's third-largest shipbuilder, Daewoo Shipbuilding & Marine Engineering (DSME), in a deal that may cost up to 8 trillion won ($8.12 billion), The Korea Times reported.

We are going to name a lead manager for the sale of DSME,'' the bank said in a statement. We believe it is a good time to retrieve our investment and return the company to the market.''

KDB said it will choose a buyer ``as soon as possible,'' but market watchers predict negotiations may drag on due to the high price of DSME.

Potential bidders include POSCO, Hyundai Heavy Industries, Doosan Heavy Industries & Construction, GS Group and STX Group. Some Chinese shipbuilders have also shown interest in DSME.

The state-owned bank owns 31.3 percent of the company as the largest shareholder. The Korea Asset Management Corp. (KAMCO), the manager of the government's bailout funds into companies, is the second largest shareholder with a 19.1 percent stake.

KDB and KAMCO agreed to put their 50.04 percent shares in DSME up for sale,'' a KDB official said. We will consider various conditions to set the price, including its current share price and a management premium.''

Following the news, DSME stocks rose sharply to close at 36,500 won per share, up 3,550 won, or 10.77 percent. Its market capitalization grew to 6.98 trillion won, but is still much lower than its 52-week high of 12 trillion won.

The planned sale of DSME is in line with the government's plan to privatize state-owned lenders, which hold massive stakes of some companies bailed out in the wake of the 1997-98 Asian financial crisis. KDB bought stocks in DSME and other ailing firms as part of the government's corporate restructuring programs. It also increased equity investments in the early 2000s.

The lender is also now seeking to sell Hyundai Engineering & Construction ― the country's third-largest builder, and Hynix Semiconductor Inc. ― the world's second largest chipmaker, and SK Networks.

The statement came days after Financial Services Commission Chairman Jun Kwang-woo said KDB will set up a holding company this year to manage the sale of its stakes in private firms and direct its transition toward a private entity.

We are now discussing with other creditor banks to determine when and how to sell the firms,'' the KDB official said.

Source: Transportweekly