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Investors interested in takeover of Daewoo E&C on better earnings: sources

All News 09:13 April 21, 2021

SEOUL, April 21 (Yonhap) -- A couple of domestic investors appear to be interested in acquiring Daewoo Engineering & Construction Co. as improving performances have boosted the builder's corporate value, sources said Wednesday.

Prospective buyers include local private equity fund Sky Lake Investment, which has recently taken over Doosan Solus Co., a South Korean copper foil maker, according to them.

KDB Investment Co., a corporate restructuring arm of the state-run Korea Development Bank (KDB), is the biggest shareholder of Daewoo E&C with a 50.75 percent stake.

KDB sold its stake in Daewoo E&C to KDB Investment in 2019, two years after it failed to sell the construction company.

The corporate logo of Daewoo Engineering & Construction Co. (Yonhap)

During an annual parliamentary audit of the state lender, KDB Chairman Lee Dong-geol said the bank would seek to sell Daewoo E&C at an opportune time after boosting its corporate value.

Industry watchers said this is the right time for the sale of the construction firm following a bumper year in 2020.

Daewoo E&C's operating income came to 558.3 billion won (US$500 million) last year, up 53.3 percent from a year earlier. In the fourth quarter of last year alone, its operating income shot up 465.4 percent on-year to 253.3 billion won.

Expectations are growing that the construction company may record better performances this year amid improving business conditions in the domestic market.

"Daewoo E&C's performance is expected to be driven by increased sales from its construction and housing sectors, which have been improving on-year from the third quarter of last year," said Kim Ki-ryong, an analyst at Yuanta Securities.

In terms of Tuesday's closing price, the market capitalization of Daewoo E&C stood at about 3 trillion won.
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