Private Equity Korea » Daewoo E&C

Kumho Industrial selling assets in package deal

Stephanie Lim — Fri, 18 Nov 2011 01:15:50 +0000

Reuters has reported that Kumho Industrial is selling 1 trillion won ($884.5 billion) worth of assets, including 12.3 percent of Daewoo Engineering & Construction, to roughly 10 private equity funds.

The buyout funds have turned in letters of intent to buy the assets from Kumho Industrial on November 18. The creditors plan to announce the preferred bidder early this week.

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CJ to sell Samsung Life shares to finance KOREX acquisition

Stephanie Lim — Wed, 19 Oct 2011 04:29:07 +0000

Maeil Business News has reported that South Korean business conglomerate CJ Cheiljedang Corp. has announced its decision to sell 3 million shares, worth 256.5 billion won ($222 million), in Samsung Life Insurance in order to finance its acquisition of Korea Express (KOREX).

CJ said in regulatory filing on Tuesday it will be selling the shares before or after-hours trade on October 20. CJ’s stake will fall to 2.99 percent after the sale.

CJ O Shopping, the cable and internet home shopping subsidiary of CJ Group, will also sell 1 million Samsung Life shares for 85.5 million won, reducing its ownership to 0.5 percent.

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KORAIL to be privatized by 2014

Stephanie Lim — Thu, 29 Sep 2011 08:04:32 +0000

Maeil Business News has reported that an official from the South Korean Ministry of Land, Transport and Maritime Affairs (MLTM) has announced that the privatization of the Korea Railroad Corporation (KORAIL) will soon be gaining momentum. Local private businesses have been showing increasing interest in breaking the century-old monopoly, and conglomerates like Dongbu Group and Daewoo E&C have begun feasibility studies in preparation for the privatization of the railway industry. Doosan E&C, and Hanjin have also expressed interest in the KORAIL privatization.

The competitive private railway system will be introduced in 2014, to coincide with the launch of the Honam High-speed Railway, which will greatly expand rail-based operations. The director of rail studies at the Korea Transport Institute predicts that the these developments will bring KTX fares down by 20 percent, causing passenger traffic to grow and freeing up 745.8 billion won of government funds that are currently spent on rail subsidies.

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CJ to acquire Korea Express for $1.75 billion

Stephanie Lim — Tue, 12 Jul 2011 01:21:25 +0000

According to the Korea Herald, CJ Group said on July 11 that it has signed a contract to purchase a 37.62 percent stake in Korea Express for 1.85 trillion won ($1.75 billion). CJ affiliates CJ Cheiljedang Corp. and CJ GLS Inc. said they will each pay 922.5 billion won to acquire South Korea’s largest logistics firm from Kumho Asiana Group.

The creditors of Korea Express, which include Asiana Airlines Inc. and Daewoo Engineering & Construction Co., plan to complete the sale by the end of July.

Click here to see previous stories regarding Korea Express.

China’s JL Construction acquires Daewoo E&C

Stephanie Lim — Tue, 28 Jun 2011 07:16:15 +0000

JoongAng Daily has reported that China’s JL Construction Co. Ltd. has purchased a 60 percent share in Daewoo Motor Sales Corp.’s Engineering and Construction Division. JL Construction paid 30 billion won ($27.6 million) for the majority stake.

Industry insiders have voiced mixed responses to the acquisition. Kim Dae-seong, an official at the Korea Housing Association, believes that JL Construction will inevitably do what other Chinese companies have done in the past. They enter the Korean market through acquisitions, and then dump the Korean firm after taking their technologies.

Kwon Oh-hyeon of the Construction Economy Research Institute of Korea believes otherwise. He predicts that JL Construction’s acquisition will pave the way for Korean construction companies to enter the Chinese market.

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Last call for final bids on Korea Express

Stephanie Lim — Wed, 22 Jun 2011 10:04:13 +0000

According to Maeil Business News, the creditors of Korea Express (KOREX), South Korea’s largest logistics company by revenue, will select a preferred bidder for the 37.6 percent stake sale next week. The deadline for final bids has been set to 5 PM Monday, June 27, as the creditors aim to have the deal completed by August or September of this year.

Although the sale of the controlling stake in Korea Express has seen considerable delay, the deal has swiftly regained speed as a result of Asiana Airlines’ purchase of three of its subsidiaries.

Three prominent conglomerates, POSCO, Lotte, and CJ, are expected to take part in the auction. Lotte Group was interested in purchasing Kumho terminal and has expressed disappointment by from the exclusion of the subsidiaries, but has decided to participate nonetheless.

UPDATE: Samsung SDS to acquire small stake in Korea Express

On June 23, Samsung SDS announced their intent to form a consortium with POSCO in purchasing a 5 percent stake in Korea Express from Asiana Airlines and Daewoo Engineering & Construction.

UPDATE 2: CJ reconsiders bid for Korea Express

On June 24, Maeil Business News reported that CJ Group is reconsidering their estimated $1.4 mn bid for Korea Express. CJ canceled its advisory contract with Samsung Securities after Samsung SDS announced intentions to jointly acquire a stake with CJ’s rival POSCO.

The report quotes a CJ official saying that they have “decided to re-examine the bidding plan” and are likely to “pull out at the final phase.”

UPDATE 3: CJ to sue Samsung for alleged betrayal

According to Maeil Business News, CJ Group has declared intentions to launch a lawsuit against Samsung Securities. An official of CJ has claimed that the group chose Samsung as their advisor for the KOREX acquisition only due to the fact that Samsung Group affirmed their disinterest in making the purchase themselves.

Thus, CJ Group views the partnership between Samsung and POSCO as an under-handed betrayal. Maeil’s report quotes a CJ official as saying that the partnership creates “a risk [that] they would leak privileged information, and we ask them (Samsung) to be held accountable.”

CJ maintains that employees of Samsung Securities were present during CJ’s tactical meetings and that they were privy to CJ’s “calculations of purchase prices, asset procurement plans, and even… plots upon acquisition.”

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Korea Express running behind schedule

Stephanie Lim — Wed, 11 May 2011 09:30:33 +0000

Graph from JoongAng Daily

JoongAng Daily has reported that the sale of Korea Express has been delayed due to differences in opinion amongst major shareholders and bidders on the inclusion of the company’s affiliate, Kumho Terminal, in the sale.

A Korea Development Bank (KDB) official stated that as a result, they “were not able to send advisory documents to bidders who have showed interest in the bid.”

Korea Express, the nation’s leading logistics firm, owns 100 percent of Kumho Terminal.

The KDB official added that the “two major shareholders of Korea Express, Asiana Airlines Inc. and Daewoo Engineering and Construction Co., disagree on whether or not Kumho Terminal should be sold separately from Korea Express or together in a block sale.” Both Asiana Airlines and Daewoo E&C each own a 23.95 percent stake in Korea Express.

Kumho Asiana Group, an affiliate of Asiana Airlines, requested that the creditors sell Kumho Terminal separately from Korea Express, so that it would be able to purchase back Kumho Terminal at a later date.

Kumho Asiana was the owner of Kumho Terminal until 2009, when it sold the company to Korea Express for 219 billion won ($200 million).

However, Daewoo E&C, asked creditors to sell Kumho Terminal with Korea Express, which would help increase the price of the latter.

In March, Posco, Lotte Group, and CJ Group submitted LOI to purchase Korea Express. Creditors were scheduled to receive final bids by May 13 and select a preferred bidder on May 16, but it was announced that the sale will be delayed until Asiana Airlines and Daewoo E&C reach an agreement.

Posco, Lotte and CJ have also demonstrated opposing opinions in this matter, as have strategic investors such as Hyosung and Kolon Industries.

According to industry officials, Posco and CJ want Kumho Terminal to be sold off separately because it will allow the final price of Korea Express to be lower.

Lotte, however, wants Kumho Terminal to be sold with Kumho Express because it would create more synergy with its existing retail business.

Kumho Terminal operates 16 regional bus terminals on large areas of land. Securing such land would help Lotte expand their enterprise by allowing them to build more retail outlets

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Kumho Asiana Group seeking to sell Daewoo E&C stake

Brett Moffat — Fri, 11 Feb 2011 01:00:21 +0000

South Korean Kumho Asiana Group is seeking to sell a 24.7% stake in Daewoo Engineering & Construction (E&C) to overseas investors, reported Money Today citing CFO Jo Hyun-ok .

Daewoo E&C is a listed, South Korean construction unit of South Korean conglomerate Kumho Asiana, which is currently in a restructuring process with creditor, Korea Development Bank.

Kumho Group plans to sell the stake held by its subsidiaries including Kumho Industrial and Asiana Airlines, according to the report The group and Daewoo E&C will hold a investors meeting next week as preparation for the sale, aiming to complete the potential block sale during the second quarter of this year.

Source: Money Today

KDB signs agreement to purchase Daewoo E&C stake

Brett Moffat — Tue, 14 Dec 2010 09:23:31 +0000

State-run Korea Development Bank (KDB) has signed a stock purchase agreement to buy a 37.16% stake in Daewoo Engineering & Construction (E&C) yesterday.

Daewoo E&C is a listed, South Korean construction unit of Kumho Asiana, the Korean conglomerate.

According to a stock exchange announcement made by Daewoo E&C, which was reported by Korea Economic Daily, KDB’s private equity fund will acquire a total of 121,027,397 ordinary shares in Daewoo E&C from financial investors such as a private equity fund managed by Mirae Asset.

The acquisition requires approval from a Fair Trade Commission, the statement noted. A related statement issued by Woori Investment & Securities, who is one among the sellers, the sale price is KRW 18,000 per share. The total deal value is KRW 2.178tn (USD 1.9bn).

See here for the stories leading up to the acquisition.

Source: Korea Economic Daily (translated)

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KDB likely to further reduce Daewoo E&C acquisition stake

Brett Moffat — Wed, 08 Sep 2010 05:04:49 +0000

Korea Development Bank (KDB) will likely reduce the stake it wants to buy in Daewoo Engineering & Construction, by another 5%, to 40%, reported the Korea Economic Daily.

The report cited industry sources as saying that KDB has changed its plan to buy stakes held by financial investors only.

It had earlier been reported that KDB would buy a 45% stake in Daewoo E&C, from an initially planned 50%.

Meanwhile, KDB denied rumours that it had been seeking to sell the stake in Daewoo E&C to an Indonesian company. According to an item in Money Today, a senior official at the state-run bank told that the rumour was groundless. Earlier yesterday, 7 September, an online report in Korea Economic Daily claimed that KDB had discussed selling the stake, with an Indonesian conglomerate, and may agree to sell the holding in Daewoo to the group.

Source: Korea Economic Daily (translated)

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Private Equity Korea » Daewoo E&C

Kumho Industrial selling assets in package deal

CJ to sell Samsung Life shares to finance KOREX acquisition

KORAIL to be privatized by 2014

CJ to acquire Korea Express for $1.75 billion

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