Doosan chief faces major test in taking Bobcat public

By Park Si-soo

Doosan Group Chairman Park Yong-maan is expected to float Bobcat, its U.S.-based construction equipment-making affiliate, by June at the earliest.

The success of the initial public offering (IPO) will be a key test of Park’s managerial ability. He has been lauded for his international entrepreneurship after leading the transformation of his conglomerate into a business-to-business entity.

For a successful IPO, however, Park needs to rebuild trust with investors in Doosan Infracore China Corp. (DICC), according to market observers.

It is also related to the financial health of Doosan Infracore, which holds a controlling stake in Bobcat.

Infracore has mounting debts because of poor sales in China.

Bobcat has a positive business outlook on the back of rising demand for construction equipment in the U.S., meaning the company, which Doosan acquired in 2007 is in favorable condition to go public.

Credit rating agency Standard & Poor’s upgraded the company’s rating last month.

Doosan is arranging the IPO, in cooperation with Hanwha Asset Management as lead manager.

It reportedly contacted the National Pension Service and other cash-rich institutional investors at home and abroad last month.

Infracore aims to raise more than 800 billion won ($736 million) to reduce its rising debt ratio ― 292.9 percent as of the end of March, up from 263.6 percent in late December.

The Fair Trade Commission recently approved Infracore’s sale of its Bobcat stake.

But it all comes down to whether Doosan can settle conflicts with investors in the DICC.

Doosan is at odds with major investors after a series of broken promises regarding their returns on investment. Investors say Doosan is responsible for the ongoing conflict.

Investors have called on Doosan to find ways to guarantee their promised returns.

According to reports, investors have been pressing Doosan to list the DICC to achieve promised gains, but failed because of declining sales.

An industry insider disputed the skepticism.

“Bobcat is certainly doing well and its outlook is also bright,” he said. “Although Doosan let down investors in the DICC, many investors are still interested in Bobcat.”