Bidders Circle $4b Daewoo Ship Deal

Thursday, July 24, 2008

Despite a sliding stock market, bidders for 's Daewoo Shipbuilding may have to pay a hefty premium and large fees to snap up the coveted $4 billion asset amid upbeat prospects for the sector.
Slow progress in the bidding process due to union protests and delays in selecting a lead manager, which coincided with a retreat in global stocks and a decision to exclude foreign bidders, has benefited potential buyers by reducing competition and the value of the deal by $2 billion from a year ago.
But a global credit squeeze and recent warnings from Korean regulators against debt-financed buyouts mean a successful buyer will have to give up some of their assets or pay hefty fees to win the world's third-largest shipbuilder.

's finance minister said on Tuesday that the government, which holds 50.4 percent of Daewoo, will seek immediate privatization of the group, clearing concerns over further delays and pushing up its share price nearly 5 percent.

Despite toughening financial market conditions, at least five groups have expressed interest in Daewoo, attracted by its strong cash flow, order books and bright earnings prospects.

That means bidders will be tempted to raise their offers and pay high borrowing costs to secure the asset, with little financial help from foreign buyout funds, as buyers will be dissuaded from including overseas funds due to Daewoo's assets in sensitive defense technology.

Daiwa Institute expects the Daewoo deal could fetch a management premium of as much as 30 percent, which will boost the value of the stake up for sale by its top shareholders to $5 billion, based on the current share price of 39,800 won.

 

source: Bloomberg

Maritime Reporter September 2013 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

A Boost for UK Offshore Drilling? DW Monday Muses

Drilling activity offshore UK is now expected to increase over the next few years as government and industry reacts to the recommendations in Sir Ian Wood’s report

MHI, IHI & DBJ Join Forces On Investments

Mitsubishi Heavy Industries, Ltd. (MHI), IHI Corporation and the Development Bank of Japan Inc. (DBJ) concluded a three-way formal agreement today on their respective

Clarksons PLC Perform Strongly in 1H 2014

Leading shipping services group, Clarksons PLC reports strong strong financial performance in the first half of 2014. Financial Results Clarksons increased revenues by 25% to £111.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Offshore Oil Pipelines Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1033 sec (10 req/sec)