POSCO Disqualified From Daewoo Bid
By Kim Hyun-cheol
Staff Reporter
The Korea Development Bank (KDB) disqualified POSCO as a bidder for Daewoo Shipbuilding and Marine Engineering, Thursday.
The decision came three days after GS Holdings pulled out from a joint bid with the steel maker for the shipbuilder, which is up for sale under the supervision of the KDB, its main creditor. The POSCO ouster leaves a field of two ― Hyundai Heavy Industries and Hanwha Group ― still in the running.
A POSCO spokesman said the move was regretful but the company wouldn't object to the bank's decision.
POSCO's ouster doesn't necessarily mean that the winner will be decided between the remaining two, as no bidder will be selected if the bidding price is too low.
The two are vying for a 50.4 percent stake in the shipbuilder that comes with the management control.
KDB said that it would pick a preferred bidder between Hyundai Heavy and Hanwha, after the inspection and evaluation process is completed in about a week, the bank said.
The bank said that a legal review concluded that the withdrawal of GS was tantamount to a significant change in the submitted bid, explaining its decision to disqualify POSCO.
POSCO, the nation's No.1 steel maker, had emerged last week as a leading contender in an effort to gain control of the world's No. 3 shipyard by teaming up with GS, an energy and retail conglomerate, four days before the deadline for the bid submission.
GS, however, abruptly dropped out Monday, hours after they handed in the final bid.
GS Holdings, the parent company of GS, later said it decided to break from the consortium due to ``an irreversible difference'' over the bidding price.
While POSCO wanted to go for a higher price, GS wanted to keep it low within the range of that which the rival bidders were expected to write in, according to industry sources.
GS said it was inappropriate to make any remarks after it had dropped out of the race.