Korea's Doosan Enerbility sells Bobcat stake in $214 mn block deal

South Korea’s major power plant builder Doosan Enerbility Co. has sold a minority stake in Doosan Bobcat Inc., its construction equipment unit, in a block deal to fund new growth businesses.

Doosan Enerbility said on Wednesday it agreed with institutional investors to unload a 4.99% stake in Bobcat for 276 billion won ($213.6 million) before the local stock exchange opened on the day.

Through the deal, the parent company sold 5 million shares at 55,200 won apiece.

The stock price for the deal has applied a 7.85% discount to Bobcat’s closing price of 59,900 won on June 20. Korea Investment & Securities Co., which managed the subscription from local and overseas investors, has set the rate between 6.18% and 8.51%. The transaction will be made on June 23.

The buyers will have a six-month lockup period, during which time investors will be restricted from selling the shares. 

Doosan Enerbility’s ownership in Bobcat will fall from 51.05% to 46.06% after the transaction. The power plant builder said it is not planning additional divestment and will retain management rights of Bobcat as its largest shareholder.

Doosan Enerbility stated it will use the proceeds to boost new growth businesses. The Doosan Group’s major affiliate, formerly Doosan Heavy Industries & Construction, is striving to shift its focus to energy solutions such as gas turbines, renewables plants, hydrogen production, storage and transport and small modular reactors (SMRs) used for nuclear power.

The company is expanding its presence in the global nuclear power industry. Last November, it signed a $1.2 billion deal with Korea Hydro and Nuclear Power Co. (KHNP) to build facilities for turbines and generators at a nuclear power plant project in Egypt.  

It also won a combined 2.3 trillion won of construction orders from the Middle East in 2022, including a 540 billion won contract to build a combined heat and power plant in Saudi Arabia by the second half of 2025.

Write to Ye-Jin Jun at ace@hankyung.com

Jihyun Kim edited this article.