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 March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

BMT Partners with Aage Hempel

BMT SMART (BMT),  has announced  that Aage Hempel has become an accredited service partner.  This agreement will provide both organizations with the opportunity

Tanker Backlog Builds at Basra

Ships face up to a three week wait; bad weather in February delayed loading, created backlog. * April intake to be reduced to clear backlog By Keith Wallis SINGAPORE,

U.S. Port Delay Boost February Air Freight

Global air freight volumes rose 11.7 percent year-on-year in February, driven by the Chinese New Year, the International Air Transport Association said on Wednesday.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Pipelines Salvage Ship Repair 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: 0.0808 sec (12 req/sec)