KDB to unveil Daewoo sale

Korea Development Bank (KDB), a top shareholder in Daewoo Shipbuilding and Marine Engineering DSME), will announce in early 2007 a plan to sell the world’s No. 2 shipbuilder, the bank’s governor said on Monday.

State-run KDB and government restructuring agency KAMCO jointly own half of the shipbuilder, one of former units of the bankrupt Daewoo Group, with a market value of $5.7b. The sale is expected to be one of the biggest M&A deals in South Korea, with KDB Governor Kim Chang-lok predicting it would fetch about $6.2 -$7.3b.

KDB has outsourced the assessment of the best ownership structure at DSME and the proper time of the sale, and expects to have the outcome in November. Earlier this month, steel maker POSCO showed interest in the shipbuilder, which is also one of Daewoo’s key customers. The state-run bank also controls 50.3% of Hyundai Engineering and Construction Co. Ltd. together with eight other creditors.