Hyundai path clear for Daewoo
Daewoo's major shareholder says deal with Hyundai to be formalised in March
Hyundai Heavy Industries is reportedly set to formalise its acquisition of a majority shareholding in compatriot Daewoo Shipbuilding & Marine Engineering, according to local media.
Hyundai will acquire Korea Development Bank's 55.7% shareholding in Daewoo under a memorandum of understanding signed earlier this month.
The seller was reported by Yonhap New Agency as saying on 12 February that a formal deal will be signed in early March.
The state-owned bank said Samsung Heavy Industries had stated its intention not to join the race to acquire the Daewoo shareholding.
Hyundai said recently that KDB will provide its Daewoo stake to Hyundai as a contribution in kind.
In return, KDB will acquire 1.25 trillion Korean won of redeemable convertible preference shares and 6 million common Hyundai shares.
Rights offerings of Hyundai and Daewoo will be executed in order to improve Daewoo's balance sheet, said Hyundai.
Post-transaction, KDB will be a major shareholder in Hyundai.
KDB's chairman Lee Dong-gull was quoted last week as saying: “We took this measure to avoid both Daewoo and Hyundai from suffering deeper financial troubles.”
