STX to form consortium for Daewoo Shipyard
STX Group said Wednesday it will form a consortium to bid for a controlling stake in Daewoo Shipbuilding and Marine Engineering (DSME), the world’s third largest shipbuilder.
Group-scale talks have been under way in jointly acquiring DSME to lessen the financial burden of an acquisition,’’ Bae Dae-kwan, vice president of the group told The Korea Times. He was attending a government-hosted meeting with industry leaders in Seoul.
We are looking for appropriate partners such as financial investors for the bid,’’ he added without naming potential partners.
As STX has officially stated its desire to take part in the POSCO-led bidding war,’’ industry experts forecast the sale will be worth over at least 8 trillion won.
This is a possible scenario. Forming a consortium seems a good option for STX to wash off cash concerns’ over its ability to make the deal,’’ a local analyst said. Based on strong confidence in the recent acquisition of Norwegian Aker Yards, STX clearly wants to go one step further.’’
A week ago, POSCO said it would join forces with SK Group to jointly bid for DSME. POSCO has requested SK Group to buy some 10 percent of DSME’s stock through unofficial routes, a high-ranking POSCO and SK source said.
The state-run Korea Development Bank (KDB) now owns a 31.3 percent stake in DSME, while the Korea Asset Management (KAMCO) holds 19.1 percent.
KDB began the process of selling the stake in March and plans to select a preferred bidder by August, after its M&A team completes due diligence.
But, it is likely the sale will be deferred for three to four months as the DSME union has asked KDB and KAMCO to restart the process from scratch, raising moral questions’’ on some potential buyers.
Among the serious contenders are POSCO, Hanwha Group, GS Holdings, Doosan Group, in addition to STX.
POSCO’s aggressive move in the bidding is burdening us,’’ Bae said.
With abundant internal reserves of 10 trillion won, POSCO leads the race, while Doosan and Hanwha are making all-out’’ efforts for DSME to diversify their business portfolios to shipyards and sea plants despite cash concerns.’’
There had been talk that the Doosan Group affiliate Doosan Heavy Industries was planning to sell new or existing shares to fund a possible bid for DSME.
But the DSME representative referred to accusations that the controlling family of Doosan have been involved in corrupt management practices, such as window-dressing accounts and the creation of slush funds, and that the company had a policy of forcing layoffs when it acquired other firms.
Union sources have also hinted that there are similar grounds for opposition to Hanwha Group, that has declared its interest in the 50.4 percent of DSME up for grabs when creditors put out a tender.
Separately, The Ministry of Strategy and Finance said it will tighten its efforts to manage liquidity in a pre-emptive measure to lessen volatility in asset markets.
The ministry said the recent surge in cash in the financial system is because of increasing demand for capital from large companies to fund M&As.
Group-scale talks have been under way in jointly acquiring DSME to lessen the financial burden of an acquisition,’’ Bae Dae-kwan, vice president of the group told The Korea Times. He was attending a government-hosted meeting with industry leaders in Seoul.
We are looking for appropriate partners such as financial investors for the bid,’’ he added without naming potential partners.
As STX has officially stated its desire to take part in the POSCO-led bidding war,’’ industry experts forecast the sale will be worth over at least 8 trillion won.
This is a possible scenario. Forming a consortium seems a good option for STX to wash off cash concerns’ over its ability to make the deal,’’ a local analyst said. Based on strong confidence in the recent acquisition of Norwegian Aker Yards, STX clearly wants to go one step further.’’
A week ago, POSCO said it would join forces with SK Group to jointly bid for DSME. POSCO has requested SK Group to buy some 10 percent of DSME’s stock through unofficial routes, a high-ranking POSCO and SK source said.
The state-run Korea Development Bank (KDB) now owns a 31.3 percent stake in DSME, while the Korea Asset Management (KAMCO) holds 19.1 percent.
KDB began the process of selling the stake in March and plans to select a preferred bidder by August, after its M&A team completes due diligence.
But, it is likely the sale will be deferred for three to four months as the DSME union has asked KDB and KAMCO to restart the process from scratch, raising moral questions’’ on some potential buyers.
Among the serious contenders are POSCO, Hanwha Group, GS Holdings, Doosan Group, in addition to STX.
POSCO’s aggressive move in the bidding is burdening us,’’ Bae said.
With abundant internal reserves of 10 trillion won, POSCO leads the race, while Doosan and Hanwha are making all-out’’ efforts for DSME to diversify their business portfolios to shipyards and sea plants despite cash concerns.’’
There had been talk that the Doosan Group affiliate Doosan Heavy Industries was planning to sell new or existing shares to fund a possible bid for DSME.
But the DSME representative referred to accusations that the controlling family of Doosan have been involved in corrupt management practices, such as window-dressing accounts and the creation of slush funds, and that the company had a policy of forcing layoffs when it acquired other firms.
Union sources have also hinted that there are similar grounds for opposition to Hanwha Group, that has declared its interest in the 50.4 percent of DSME up for grabs when creditors put out a tender.
Separately, The Ministry of Strategy and Finance said it will tighten its efforts to manage liquidity in a pre-emptive measure to lessen volatility in asset markets.
The ministry said the recent surge in cash in the financial system is because of increasing demand for capital from large companies to fund M&As.