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Formal bids invited for DSME sale

Formal bids invited for DSME sale

Seoul: Creditors of Daewoo Shipbuilding & Marine Engineering (pictured) have formally launched the bidding process for a 50.4% stake in shipyard, reports Reuters. Korea Development Bank (KDB) and state-run Korea Asset Management Corp are the offering 96.4 million shares they hold in Daewoo Shipbuilding, according to an invitation notice carried in early Friday edition of the Korea Economic Daily.

The notice, which gave Wednesday August 27 as the closing date for bids, specified that a bidder must meet the legal requirements to invest in the defence industry, a condition that effectively rules out foreign contenders.

The deal is expected to fetch up to $8bn, more than double its current market valuation, due to competition from local conglomerates seeking a new growth engine and strong earnings prospects for Daewoo.

POSCO, the world's fourth largest steelmaker, is seen as a strong candidate to buy Daewoo and has been seeking partners to bid with. Construction-focused GS Group and energy-to-insurance group Hanwha are also reported to be preparing bids, while would-be buyer Doosan Group recently decided to drop out of the race.  [22/08/08]