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Doosan Group

Doosan Heavy seeks new buyer for construction arm after deal falls through

By Sep 08, 2020 (Gmt+09:00)

Doosan Heavy Industries & Construction Co. has begun fresh talks with potential buyers for construction affiliate Doosan Engineering & Construction Co. after negotiations fell through with Daewoo Development Co., according to the investment banking industry on Sept. 8.

The deal was scrapped when the two parties failed to agree on a price. Doosan Group expected about 300 billion won ($252 million) for the construction arm, but Daewoo Development would not budge from its initial proposal in the 200 billion won range.

Earlier in June, Doosan Heavy had carved out bad assets from Doosan E&C to make it more attractive to potential buyers and to speed up the sale process. However, fizzled talks with Daewoo Development put the deal back on the table, prompting the South Korean power plant builder to seek new buyers.

In the meantime, Doosan Heavy plans to offload its Vietnam-based entity Doosan VINA to affiliates to address the immediate liquidity crisis. The company is expected to fetch about 60 billion won through the sale.

The sale of Doosan E&C is part of the group's pledge to raise 3 trillion won through the sale of core assets and paid-in capital increases in return for a 3.6 trillion won bailout from creditors.

Last week, the group secured about 700 billion won from its sale of Doosan Solus Co. Ltd., a copper foil and OLED materials maker, to local private equity firm SkyLake Investment Co. alongside an additional 453 billion won from offloading Doosan Corporation Mottrol to a consortium of two Korea PEFs — Socius Advisors and Well to Sea Investment Co. — for 453 billion won.

In August, the group also sold Club Mow, a golf course, for 185 billion won, and a 97% stake in venture capital firm Neoplux Co. Ltd. to Shinhan Financial Group for 73 billion won.

So far, the Doosan Group has snatched about 1.3 trillion won in total through the sale of its assets. Last week, the group decided to raise 1.3 trillion won to wrap up the first round of its debt restructuring, as Korean Investors reported earlier.

The group is aiming to complete the 3 trillion won self-rescue measures by year’s end with the sale of Doosan Heavy’s stake in Doosan Infracore Co. Ltd., a machinery manufacturer.

Write to Ri-ahn Kim and Jun-Ho Cha at

Danbee Lee edited this article

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