Daewoo To Invest In Joint Manufacturing Operation

South Korea's Daewoo Heavy Industries Co. will invest $4.5 million in a joint ship engine manufacturing operation between state-run Hanjung and Samsung Heavy Industries Co., the Ministry of Commerce, Industries and Energy said. The ministry said Daewoo Heavy will hold a 17 percent stake through its investment in the newly named HSD Engine Co. Hanjung will hold a majority 51 percent stake, and Samsung Heavy 32 percent. Hanjung and Samsung will also pay $11 million and $6.8 million, respectively along with Daewoo's investment to raise HSD's equity capital to $26.8 million from the current $4.5 million. The ministry said most of the new capital would go to facility investment and the rest to research and development. Hanjung and Samsung agreed to merge their ship engine manufacturing operations last December as part of a government-initiated drive to seek mergers and acquisitions in sectors saddled with overcapacity. Daewoo Heavy is an affiliate of the troubled Daewoo Group, whose creditors put 12 of the group's affiliates under debt restructuring programs in August.