By Oh Young-jin
Staff Reporter
Doosan Group is planning to raise a total of 780 billion won or about $630 million in additional liquidity through the sale of its three affiliates and a stake in an aerospace company.
Doosan's plan follows rumors that the conglomerate is in financial trouble after a large overseas acquisition.
In a news conference at Doosan Tower, the group's headquarters in downtown Seoul, Wednesday, Lee Sang-ha, the group's vice president, said that three Doosan affiliates and a 20.54 percent stake in Korea Aerospace Industries (KAI), a key defense contractor that manufactures the T-50 Golden Eagle jet trainer, would be sold. The three affiliates are Doosan DST, a defense contractor; SRS Korea, which runs the Burger King franchise; and bottle cap maker Samhwa Crown.
Doosan Corp. holds a 51-percent stake in two special purpose companies, Doosan Investment Portfolio (DIP) Holdings and Odin Holdings, which also include Mirae Asset PEF and IMM Private Equity as financial investors. Doosan Corp. is a de facto holding firm for the group.
Mirae and IMM have made an equity investment of 270 billion won. Doosan Corp is chipping in with 280 billion won for DIP Holdings but will receive 150 billion won from the sale of Samwha and SRS, bringing down its equity investment to 120 billion won.
``The assets will be put up for sale in the next five years,'' Lee told reporters. ``From the point that reaches the third-year mark, stakeholders will have a preferential status in the purchase of stakes when one or more of them want to sell.''
He said that the financial investors are participating in the plan with no strings attached. They have not been offered a put option, he said as an example, adding that sale prices were set through consultations between sellers and the private equity firms.
Doosan Infracore is expected to acquire an additional 630 billion won in liquidity by selling DST and its KAI stake. Infracore plans to pay off some of loans to creditors that it obtained in the purchase of Bobcat. Infracore purchased the world's top compact construction equipment firm and two other units from U.S. industrial conglomerate Ingersoll-Rand for $4.9 billion in cash in 2007. A Doosan spokesman said that no talks were under way with EADS, the European defense contractor for its KAI stake.
``We are preemptively enhancing the financial situation of Doosan Infracore International, the firm set up to take over Bobcat that received loans from creditors,'' Lee said. He explained that Doosan plans to meet the schedule of capital increase by the end of the year. A capital increase of $1 billion was decided at a board meeting last August.
He said that his company sold off a total of 1.7 trillion won in assets last year and this year, adding that special purpose companies will be used for future restructuring.