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Doosan Heavy to spur its rescue plan with 2.2 tln won from asset sale

All News 16:33 September 22, 2020

By Nam Kwang-sik

SEOUL, Sept. 22 (Yonhap) -- Doosan Heavy Industries & Construction Co. said Tuesday it will expedite its plan to combat its credit crunch with proceeds worth 2.2 trillion won (US$1.9 billion) from the brisk asset sale by Doosan Group.

"Doosan Heavy will speed up its self-rescue plan by pushing for the sale of Doosan Engineering & Construction Co. and its stake in Doosan Infracore Co., along with the plan to sell its new shares worth 1.3 trillion won," a company official said on condition of anonymity.

Doosan Heavy wholly owns Doosan Engineering and has a 36 percent stake in the group's construction equipment maker Doosan Infracore.

Sales manager Credit Suisse is reported to have invited preliminary bids for the 36 percent stake in Doosan Infracore on Sept. 28.

Earlier this month, Doosan Group said Doosan Heavy will issue new shares worth 1.3 trillion won and sell them first to its shareholders and then to the public.

This photo shows Doosan Group's headquarters building Doosan Tower in downtown Seoul. (Yonhap)

Last March, Doosan Heavy received a cash injection of 3 trillion won from its creditors, including the Korea Development Bank (KDB), to brace itself for its short-term debts worth 4.2 trillion won, which should be paid within this year.

In return, Park Jeong-won, chairman of Doosan Group, said in early June that the group will repay its debts of 1 trillion won by the end of the year by selling its assets.

Under the asset sale plan, the power plant builder sold its 27-hole golf course Club Mow to a consortium led by Hana Financial Investment Co. for 185 billion won and venture capital firm Neoplux Co. to Shinhan Financial Group Co. for 73 billion won.

Doosan Group's holding company, Doosan Corp., sold its 18.05 percent stake in battery foil maker Doosan Solus Co. to private equity fund SkyLake Investment Co. for 238 billion won, with 34.88 percent held by key stockholders, including Doosan Group Chairman Park, sold to the private equity fund for 460 billion won.

Doosan disposed of its business division and oil pressure machine maker Doosan Mottrol to a consortium of two local private equity investment firms -- Socius Advisors and Well to Sea Investment Co. -- for 453 billion won, Doosan Group said.

Ahead of the sale, Doosan Mottrol will be spun off into two entities.

The group has also signed a deal with the local property private equity fund Mastern Invest Management to sell its headquarters building Doosan Tower in downtown Seoul for 800 billion won next Monday.

ksnam@yna.co.kr
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