On May 9, the state-owned Korea Development Bank (KDB) announced it will set up a private equity fund this month to complete the takeover of Daewoo E&C, the construction unit owned by troubled Kumho Asiana Group, Yonhap News reported .
The state lender plans to complete due diligence on Daewoo Engineering & Construction Co. this week and establish a fund pool to buy a controlling stake – 50 percent of the stock, plus one share – in the builder, KDB said.
The bank, previously the biggest policy lender before it spun off Korea Finance Corp., agreed with Kumho Asiana to buy up the majority stake on Dec. 30, when the conglomerate entered into a creditor-led debt rescheduling program.
KDB will invite new financial investors to chip in to the private equity fund but exclude companies that had expressed interest in buying the builder – TR America, Posco and STX Group – because they either scaled back their interest or have insufficient capital, it said.
“KDB will attract financial investors in the near future after sending them an information memorandum,” a KDB official said.
The bank plans to complete the purchase of Daewoo Engineering in July or August, in which it will pay a total of 2.9 trillion won ($2.5 billion), or 18,000 won per share.
Meanwhile, a report in Asia Economy stated that the KDB is planning to not include a strategic investor in its acquisition fund.
The report cited an unspecified insider at the state-run bank as saying that KDB will send the information memorandum to financial investors only. KDB is thought to be thinking about re-selling the stake after some time, and is not including strategic investors for this reason.
(Sources: Yonhap News, Asia Economy)
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