Doosan rushing to sell assets to improve financial health

SEOUL, Jan. 21 (Yonhap) -- Doosan Group, a South Korean machinery and power equipment conglomerate, is seeking to speed up the sale of core assets in a bid to improve its financial footing, industry sources said Thursday.

According to the sources, Doosan Infracore Co., the group's construction equipment maker, is set to soon seal a 1.3 trillion-won (US$1.08 billion) deal to sell its machine tool business unit to a private equity fund operated by Standard Chartered.

The private equity fund was named last month as the preferred bidder for the business unit, which has been up for sale in order to reduce its debt and therefore improve its financial status.

Doosan Infracore has been mired in a protracted slump in the construction sector, in China in particular.

Doosan Infracore hopes that its debt, currently staying at 5.3 trillion won, will be reduced to below 3.5 trillion won after the asset sale is completed. Currently, its financial costs run some 300 billion won annually.

Doosan Infracore has been seeking to sell other assets, including a French unit.

Doosan Group's defense unit, Doosan DST, is also up for sale. Hanwha Group, LIG Group and other potential investors have shown interest in taking over the unit, a deal estimated at some 600 billion won.

Earlier this month, Doosan Group also sold a stake in Korea Aerospace Industries Ltd. for some 300 billion won, whose proceeds will be used to beef up its financial status.

sam@yna.co.kr
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