 |
| Doosan Group logo displayed at its head office in Dongdaemun, Seoul / Yonhap |
By Nam Hyun-woo
State-run lenders will loan an additional 1 trillion won ($807.8 million) to Doosan Heavy Industries & Construction, after accepting Doosan Group's detailed self-rescue plan aimed at improving its overall financial structure, and to protect the conglomerate from bankruptcy.
The Korea Development Bank (KDB) and the Export-Import Bank of Korea (Eximbank) will each hold committee meetings today, at the earliest, to finalize the new bailout program for Doosan Heavy.
Earlier the parent group presented a detailed self-restructuring plan to improve cash flow to support Doosan Heavy by restructuring its portfolio and unloading both core and non-core assets. The plan is believed to be worth 3 trillion won. This is in line with the mid-tier conglomerate's earlier promise to creditors that it would secure 3 trillion won through restructuring.
In accepting the plan, the government said Doosan Heavy will abandon its coal-fired and nuclear power plant businesses and "morph" into a green energy company. Though the administration did not reveal the specifics of the plan, Doosan Corp. will secure new capital through a new share offering, and sell "major subsidiaries and none-core assets" to improve Doosan Heavy's financial standing.
If the lenders finally approve of the plan and give the 1 trillion won loan, a total of 3.4 trillion won of taxpayers' money will have been put into Doosan. Since March, the KDB and Eximbank have extended 2.4 trillion won of financial aid, including a 1 trillion won line of credit.
Drawing market interest are the subsidiaries that Doosan Group will put up for sale.
Currently, Doosan Group and its owner family are seeking to unload their stakes in material business unit Doosan Solus, Doosan Corp.'s hydraulic business department and Doosan Heavy's subsidiary Doosan Mecatec. Along with these subsidiaries, the group has put its real estate assets, including its headquarters of Doosan Tower in Dongdaemun, Seoul, up for sale.
Holding the key is Doosan Bobcat, a heavy equipment subsidiary of Doosan Heavy and the cash-cow for the group. If the group fails to receive enough from selling the above-mentioned assets, it may have to tap into its Doosan Bobcat stake to keep its 3 trillion won pledge.
"The creditors have told Doosan to look into the scenario of selling its Bobcat stake and Doosan replied that it will consider this," said an official at a global accounting firm with knowledge of the plan.
Doosan Heavy has a 38.41 percent stake in Doosan Infracore, which holds a 51 percent stake in Doosan Bobcat.
Market anticipation on the value of Doosan assets up for sale is pessimistic. The monetary value of Doosan Solus is believed to be the most, with the group hoping to raise between 800 billion won and 1 trillion won for a 61 percent stake held by the holding firm and owner family. However, potential buyers, such as Lotte Chemical, want to pay less.
"The group's cash-cow businesses are the key to this plan, because except for Doosan Infracore and Doosan Bobcat, there are not many attractive assets left for Doosan to sell to secure liquidity," HI Investment & Securities analyst Lee Sang-heon said.
Doosan Heavy has a huge amount of liabilities, with 4.2 trillion won due this year.
![[VIDEO] Filipina K-pop idol and K-drama actress react to stereotypes about the Philippines](https://img.koreatimes.co.kr/upload/thumbnailV2/230201chantyjoyce2web_5891a49058fb1.jpg/dims/resize/178/optimize)
![[INTERVIEW] Tati Gabrielle, actress of Korean, African-American descent, feels proud of her heritage](https://img.koreatimes.co.kr/upload/thumbnailV2/d2f45162b11d4965a7168093560f59e3.jpg/dims/resize/178/optimize)
