Bobcat sale pressure growing under 'eco-friendly Doosan'
Doosan Group headquarters in Jung-gu, Seoul / Yonhap
By Nam Hyun-woo
Doosan Group and its two state creditors are considering selling equipment subsidiary Doosan Bobcat in a “one-time deal” to ensure the group's future sustainability, sources familiar with the issue said Tuesday.
The Korea Development Bank (KDB) and Export-Import Bank of Korea, have outlined restructuring guidelines for Doosan Group to possibly become an eco-friendly energy conglomerate.
Specifically, the state creditors have asked the group to put more focus on gas and wind turbines, and other equipment- and renewable energy sources-related businesses and abandon existing businesses that don't fall into this segment.
Officials familiar with the issue said the guidelines are interpreted as pressuring Doosan Heavy to unload its construction equipment subsidiaries ― Doosan Infracore and Doosan Bobcat.
Doosan Group has selected Credit Suisse as the lead manager for the sale of Doosan Heavy's 36.27 percent stake in Doosan Infracore, although officials have remained silent about this. Reports said the planned sale does not include Doosan Infracore's 51 percent stake in Doosan Bobcat, leading analysts to assume that the former will be spun off and sold while the stake in the latter will be held by an investment entity.
This entity is then expected to be merged into Doosan Heavy, and profits generated by Bobcat could be used directly for its normalization, according to the reports.
After Doosan's self-restructuring plans ― primarily the unloading of non-core assets ― received a lukewarm response from the financial market, the state-run creditor banks opted to sell off Doosan Bobcat to speed up the group's normalization.
Doosan earlier promised to raise 3 trillion won through restructuring in return for receiving 3.6 trillion won in additional loans from the banks.
So far, Doosan Group has put materials unit Doosan Solus, Doosan Corp's hydraulic components business division, chemical equipment firm Doosan Mecatec and construction firm Doosan Engineering & Construction up for sale.
However, the group has yet to see any substantial progress as no potential buyers have shown interest in purchasing them.
“While the bailout is seen as a quick remedy for Doosan Heavy's 4.2 trillion won in debt scheduled to be repaid by the end of the year, the restructuring is more focused on a long-term strategy for the group, which is the transformation into an eco-friendly power generation conglomerate,” an industry official said.