Seoul: The chief executive officer of the state-run Korea Development Bank said Monday he isn't concerned about the prospects for the sale of Daewoo Shipbuilding & Marine Engineering Co. as companies were set to submit their final bids to buy a controlling stake in the world's No. 3 shipyard.
Prospects for the sale of Daewoo Shipbuilding were dimming as the shipbuilder's stock price has more than halved since August, when prospective bidders were invited to send their preliminary bids, amid the global financial crisis and following economic slowdown, some analysts say.
"I'm not seriously worried about (that issue), because a price is calculated on average (stock) prices quoted for at least three months," KDB Chief Executive Min Euoo-sung said.
For weeks, officials at KDB have indicated the tender for Daewoo Shipbuilding would fail if a purchase price is too low.
About three months ago, analysts had expected the controlling stake in Daewoo Shipbuilding could fetch some US$7 billion, but they expect a price of as low as $4 billion today.
Hyundai Heavy Industries Co., the world's largest shipbuilder, a consortium of POSCO Co., the world's No. 4 steelmaker, GS Group, an energy and retail conglomerate, and Hanwha Group, an insurance and chemicals conglomerates, were widely expected to send their final bids to purchase the 50.4 percent stake in Daewoo Shipbuilding later in the day.
KDB is the biggest shareholder of Daewoo Shipbuilding with a 31 percent stake and is managing the sale.
The transaction, if successful, would be one of the biggest asset sales by South Korea's state-run financial institutions, which took over many indebted private companies in the wake of the 1997-98 Asian financial crisis.
A preferred bidder is likely to be chosen as early as Oct. 25, according to KDB.
Meanwhile, Hanwha Grou, South Korea's ninth-largest family-run business conglomerate, said Friday it plans to sell a 21.36 per cent stake in its unlisted life insurance unit to fund the group's bid to buy a controlling stake in Daewoo Shipbuilding and Marine Engineering Co. [13/10/08]
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