이 기사는 2021년 04월 29일 08시00분 thebell에 표출된 기사입니다

KDB Investment has been approached by potential buyers interested in a controlling stake in Daewoo Engineering & Construction (Daewoo E&C). But the investment unit of the state-controlled Korea Development Bank (KDB) is taking a cautious approach following a failed sale attempt three years ago.

SkyLake Investment has formally approached KDB Investment about acquiring Daewoo E&C but discussions between the two sides have not begun, industry sources said.

DS Networks, one of the country’s largest developers, is said to be in talks to team up with SkyLake Investment. Two other private equity firms have also reportedly expressed interest in the building company.

However, KDB Investment is showing no signs of starting the sale process, taking a cautious approach to engaging in talks with potential buyers.

“(The sale talks) are at very early stages,” said a source in the investment banking industry. “KDB Investment has not even determined the method and timeline for the sale.”

The approaches came about three years after the collapse of the deal between KDB, which then owned Daewoo E&C, and Hoban Construction. In 2018, Hoban Construction called off its planned acquisition of Daewoo E&C at the last minute due to concerns about losses and contingent liabilities related to the company’s overseas construction projects.

“KDB Investment is being cautious to ensure that the sale of Daewoo E&C is completed smoothly this time,” said a source familiar with the matter. “It is willing to sell Daewoo E&C to any potential investor with authentic intention to buy the company at a proper price, but it is clearly not in a hurry.”

Daewoo E&C recently reappointed Kim Hyung as chief executive and also promoted its finance chief, Jung Hang-ki, to co-chief executive alongside Kim, indicating that the launch of the sale process is imminent. Jung will be responsible for leading the sale of the company.

The price of Daewoo E&C’s stock is also on the upward trend. It rose slightly to close at 7,310 won ($6.58) on Wednesday, more than double the level at the end of last year. Analysts are projecting Daewoo E&C shares to rise above 8,000 won in the mid to long term on the back of an improvement in its earnings and financial position.



A price tag including a control premium is expected to be in the low to mid 8,000 won range, compared to 7,700 won per share offered by Hoban Construction in January 2018. Daewoo E&C shares traded in the 6,000 won range at the time.

“KDB would want to avoid criticism that it wastes public funds by selling Daewoo E&C at a cheap price. That means the company’s stock price, on which the sale price will be based, is important,” said an industry insider.

Another insider said: “Potential buyers interested in acquiring Daewoo E&C are said to have offered the prices ranging between 6,000 won and 7,000 won per share, but KDB is aiming for 9,000 won per share.”

KDB acquired a majority stake in Daewoo E&C for 3.2 trillion won, or 18,000 won per share, in 2011. The bank handed over its stake to KDB Investment at a price of 6,451 won per share in July 2019 three months after the launch of the investment unit. (Reporting by Jin-young Ko)