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KDB, Hanwha sign deal on Daewoo Shipbuilding sale

Seoul: South Korea's state-run Korea Development Bank (KDB) said Friday that it signed a preliminary deal with Hanwha Group on the sale of a controlling stake in Daewoo Shipbuilding & Marine Engineering Co, local newswire Yonhap reported.

Starting next week, Hanwha will begin a due diligence on Daewoo Shipbuilding for three or four weeks, the bank said. The deal came after Hanwha was named in late October as a preferred bidder for the 50.4-percent stake in the world's third-largest shipbuilder.

KDB, the shipyard's biggest shareholder, didn't disclose the sale price, but industry sources estimate that the group offered over 6.5 trillion won (US$4.71 billion) for the stake.

A final contract for the controlling stake in Daewoo Shipbuilding will be signed before the end of the year after Hanwha completes due diligence, it said.

The bank, which arranged the sale and is the shipyard's biggest shareholder, didn't disclose the sale price.

Shares of Daewoo Shipbuilding rose by the daily limit of 15 percent to 15,650 won as of 10:00 a.m. on the Seoul bourse.

Hanwha, with interests from explosives to shopping malls, is seeking to expand into new businesses such as oil tankers and deep-sea drilling structures to boost earnings growth.

Daewoo Shipbuilding was rescued from near-collapse by its creditors through a debt-for-equity swap in 2000. [14/11/08]

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