POSCO and three other South Korean companies submitted their formal bids Tuesday for Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipyard, a state-run bank said.
Korea Development Bank (KDB) and state-run Korea Asset Management Corp. (KAMCO) are seeking to sell a combined 50.4 percent stake in the shipyard, which they bailed out in 2000 after its parent Daewoo Group collapsed under a mountain of debt. KDB said it will pick a preferred bidder in October after allowing POSCO, Hyundai Heavy Industries Co., GS Group and Hanwha Group to conduct a due diligence on Daewoo Shipbuilding for three weeks starting next week.
The deal, estimated to be worth as much as 7 trillion won (US$6.36 billion), has drawn much attention from potential bidders as the winner will likely gain a new growth engine from the shipyard's lucrative energy-related business and strong cash flows.
KDB and KAMCO plan to complete the sale of Daewoo Shipbuilding by the end of the year. Creditors are seeking to sell off other bailed-out firms, including Hynix Semiconductor Inc. and Hyundai Engineering & Construction Co.
So far this year, Daewoo Shipbuilding has won $10.9 billion worth of orders to build ships and offshore facilities, about 62 percent of this year's target of $17.5 billion. Its backlog has reached about $42 billion.
Source: Trading Markets