Park Sam-koo
Kumho Asiana Group Chairman |
By Kim Yoo-chul
Staff Reporter
Kumho Asiana, Korea's seventh largest chaebol, put the controlling stake in Daewoo Engineering and Construction up for sale Sunday, three years after acquiring it.
The decision is part of the group's rescue efforts to tide over looming cash flow problems.
``We have decided to sell Daewoo in a way to cast off concerns that we may suffer from the upcoming put-option deal in July,'' Chang Sung-ji, vice president of Kumho Asiana's strategic management division, told The Korea Times.
``We will talk to main creditor banks and advisors to decide on the selling size of Daewoo,'' he said, adding that his company will consider the option of selling its entire stake in Daewoo.
Kumho Asiana currently owns about 33 percent of Daewoo, while a group of financial investors together hold another 39 percent. The remainder is in the hands of ordinary investors.
The group bought Daewoo for about 6.4 trillion won ($5.2 billion) in 2006, or 26,250 won per share.
At the time of the deal, Kumho Asiana offered a three-year put-option deal, which requires the company to buy back Daewoo shares from investors at 32,000 won per share after Dec. 15 this year should the stock trade under that price by that time.
Its price closed at 12,850 won Friday after peaking at around 30,000 won in late 2007. It is currently being traded at less than one third of the put-option price.
``We have considered a lot of options, including setting up a private equity fund with financial investors and also investing in exchangeable bonds. But we concluded that these moves might not be of help to strengthen its financial health,'' Chang said.
Kumho Asiana remains in talks to sell two of its affiliates, Asiana IDT and Kumho Autolease, to generate 239.5 billion won (about $191 million).
Kumho Asiana, with assets of 44 trillion won, is involved in a variety of business sectors, including construction, logistics, life insurance and aviation.
However, it has been hit by a cash flow problem after spending aggressively in mergers and acquisitions in recent years, with Daewoo and Korea Express being its biggest trophies.
Kumho Asiana had announced plans to raise 4.55 trillion won by selling assets, including unlisted Kumho Life.
yckim@koreatimes.co.kr
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