KDB Gives Ultimatum on Hanwhas Shipyard Takeover
The main creditor of Daewoo Shipbuilding & Marine Engineering threatened Thursday to scrap a deal to sell the shipyard to Hanwha Group unless the conglomerate sticks to the Jan. 30 deadline to finalize the contract, Yonhap News reported.
The state-run Korea Development Bank (KDB) picked Hanwha in October as a preferred bidder for the 50.4-percent stake in the world's No. 3 shipbuilder that was placed under a debt workout program in 1999. Both sides agreed to seal a final deal by December.
Hanwha reportedly offered 6.5 trillion won ($4.95 billion) for Daewoo Shipbuilding. Amid a severe credit crunch, the group demanded a delay in payments, but KDB rejected it. Instead, the policy lender agreed to extend the deadline until Jan. 30. and buy some of Hanwha's assets to help it raise takeover money.
"Unless Hanwha accepts such compromises, we will disqualify the group as the prime bidder, considering it has no will to buy the shipyard," KDB Chairman Min Euoo-sung was quoted as saying in an interview with Yonhap News Agency.
"The terms of sale will not be changed, and as far as I know, Hanwha is reviewing the offer."
Min said a private equity fund formed by KDB and other institutional investors would buy some of the group's assets and return any profits to Hanwha after selling the assets in two or three years.
"The proposal is a 'win-win' strategy for both," Min said. "Should Hanwha not take our offer, it can not help being translated into it not buying the stake," he said, adding that the lender will exercise its right as a seller, including taking down payments estimated at 300 billion won if Hanwha does not fulfill its requirements by the deadline.
Daewoo Shipbuilding shares have plunged by more than 50 percent since initial bids for the stake were made in August.
Hit by global financial turmoil, Hanwha has been facing difficulty in raising money through the sale of its holdings in real estate and Korea Life Insurance, the nation's No. 2 life insurer.