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Doosan Infracore rallies on hope for new investor

Industry 11:39 June 17, 2020

By Nam Kwang-sik

SEOUL, June 17 (Yonhap) -- Shares in Doosan Infracore Co., the construction equipment affiliate of South Korea's cash-short Doosan Group, traded higher for a second day on Wednesday as its parent is seeking to sell a stake in the company.

On Tuesday, Doosan Infracore soared by the daily permissible limit of 29.86 percent to close at 7,480 won (US$6.16), hitting a 52-week high as retail investors bet that the stake sale will boost Doosan Infracore's value going forward.

Doosan Group said earlier it will dispose of a 36.27 percent stake in Doosan Infracore held by Doosan Heavy Industries & Construction Co.

In morning trade, the country's largest construction equipment maker traded at 7,610 won as of 11:30 a.m., up 1.87 percent from the previous session, after rising as high as to 8,340 won.

This photo shows the headquarters of South Korea's 15th-largest conglomerate, Doosan Group, on June 16, 2020. The ailing group will reportedly sell its core construction equipment manufacturing arm, Doosan Infracore Co., as part of its self-rescue measures. (Yonhap)

The sale of Doosan Infracore is as part of Doosan Group's self-rescue measures worth some 3 trillion won.

Market watchers said the deal could fetch between 600 to 800 billion won. Credit Suisse will reportedly arrange the deal as a sales manager.

Observers, however, have been pessimistic about the sale of the stake in Doosan Infracore, maintaining their investment recommendations at "HOLD," which means there are no positive leads to move up share prices.

They predicted it will be difficult for the group to find a buyer for Doosan Infracore in the near future due to a lack of viable investors.


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