Seoul: Daewoo Shipbuilding & Marine Engineering Co., the world's second-largest shipyard, jumped the most in a week in Seoul trading after Posco said it may bid for the company, reports Bloomberg. The steelmaker will "consider" an offer once the shipyard is put up for sale, Posco ceo Chung Joon Yang said yesterday. Daewoo Shipbuilding rose as much as 12% to 21,600 won and was at 21,150 won as of 9:41 a.m. in Seoul.
Posco, Asia's most profitable steelmaker, has 'lots of money' for acquisitions and can bid for both Daewoo Shipbuilding and Daewoo International Corp., an energy developing company, Chief Financial Officer Lee Dong Hee said yesterday. Korea Development Bank plans to sell a controlling stake in Daewoo Shipbuilding after rejecting a 6.3 trillion won ($5.6 billion) bid from Hanwha Group in January last year.
"Finding an owner is crucial for Daewoo Shipbuilding," said Lee Jae Won, an analyst at Tong Yang Securities Inc. in Seoul. "It needs one to find new source of earnings to counter a slump in the shipbuilding industry."
Daewoo Shipbuilding and other shipyards are diversifying their businesses as demand for new vessels has shrunk amid a credit crisis and excess capacity from five years of record ship orders that ended in 2008.
Posco, which bid for Daewoo Shipbuilding in the previous auction, fell as much as 2.2% to 579,000 won. Daewoo International rose as much as 5.2%. The energy company is "top of our list of priorities," Chung said.
Korea Development Bank and Citigroup Inc. last month were selected to arrange a Daewoo Shipbuilding sale this year. The state-owned lender is the shipyard's biggest shareholder. [15/01/10]
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