Goldman Sachs to manage Daewoo sale

The state-run Korea Development Bank (KDB) said that Goldman Sachs was chosen to manage the sale of Daewoo Shipbuilding & Marine Engineering, the world’s third-largest shipbuilder.

The KDB and state-run Korea Asset Management Corp., which hold a combined 50.37% of the shipyard, are seeking to sell their stakes in the shipbuilder this year. A preferred bidder will be selected in August, the lender said. The planned sale of Daewoo is in line with the government’s push to privatize some state-owned lenders, many of which hold massive stakes in some of the companies bailed out in the wake of the financial meltdown that hit the country in late 1997.

Shipyards in South Korea, the world’s largest shipbuilding nation, have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world.

Observers said the selling price may reach between 5 trillion won ($5 billion) and 8 trillion won, given its current business performance. GS Group, POSCO, Hyundai Heavy Industries, Doosan and other companies are reportedly interested in taking over the shipyard.

The shipyard has clinched deals valued at $1.9 billion to build 15 ships so far this year. Daewoo Shipbuilding aims to win $17.5 billion worth of orders in 2008. Daewoo Shipbuilding’s net profit more than quadrupled to 321 billion won last year and sales jumped 31.6% to 7.1 trillion won. The shipyard also won a record $21.5 billion worth of shipbuilding orders last year. In 2008, the company is aiming to win $17.5 billion worth of shipbuilding orders.