이 기사는 2021년 06월 23일 07시56분 thebell에 표출된 기사입니다

DS Networks, a South Korean real estate developer bidding for Daewoo E&C, has made it clear that its listing plan and pursuit of the Kospi-listed construction company are two different things.

“(The listing plan) is part of our big-picture strategy to diversify sources of financing,” DS Networks chief executive Kim Young-chul told thebell on Monday, adding that the plans are still in the early stages. He also said that a potential listing is “separate” from the company’s bidding for Daewoo E&C.

As part of preparations for an initial public offering, DS Networks earlier this year appointed a financier who previously worked at Koramco REITs & Trust and Koramco Asset Management as its new finance head, and received proposals from brokerage firms last week to select underwriters.

There's still a long way to go. The company has not yet adopted the Korean International Financial Reporting Standards, or K-IFRS, which is required for public companies. It may also need to address considerations associated with project financing vehicles, which are paper companies commonly used to support the development of projects. Market watchers expect the company’s listing to take place as early as next year.

DS Networks later this week is set to participate in a bidding round for Daewoo E&C, one of the country’s largest construction companies. However, even if it wins the race, DS Networks is unlikely to seek to go public through the back door by merging with the Kospi-listed company, as this could cause a backlash from shareholders and the controversy over the merger ratio.

DS Networks’ history goes back to 1981 when Daesung Inc was founded by father of current chairman Chung Jae-hwan. The company is 100% owned by the Chung family.

Since he took the helm in 2000, Chung has transformed the company into a leading real estate developer, with its revenue exceeding 1.2 trillion won ($1 billion) in 2018.

Last year, the company recorded an operating income of 124.9 billion won and net income of 60.4 billion won on revenue of 1.34 trillion won on a consolidated basis. It had 420 billion won in cash and cash equivalents and 1.2 trillion won in land inventory at the end of 2020.

DS Networks has also expanded its business to include financial services, establishing DS Networks Asset Management in 2018. (Reporting by Min-kyu Sin)