Seoul: Creditors, including the Korea Development Bank (KBD, are expected to announce a preferred bidder for a 50.4% controlling stake in Daewoo Shipbuilding & Marine Engineering in the next 48 hours. Insurance and financial conglomerate Hanwha Group and competitor shipbuilder Hyundai Heavy Industries (HHI) have both submitted offers, estimated to be in the region of $4-6bn.
However, in an interview with Reuters, KBD chairman Min Euoo-sung stated that if the current bidding process fails to pick a preferred suitor, previously disqualified bidder POSCO will be eligible to form a new consortium and submit an offer for the shares.
POSCO's proposal for DSME fell through when its bidding partner GS Group pulled out of the race, making the steel producer ineligible to continue bidding. Ironically, POSCO shares increased in value following the disqualification, while current bidder Hanwha has seen a decrease in share value as investors question the viability of large purchases amidst such economic uncertainty.
However, it remains to be seen if POSCO will be allowed another shot at bidding for the shipyard - which may increase share value for the steelmaker in the long term, or if it will have to go down other avenues to diversify its portfolio. [23/10/08]
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