Machine Tools
Doosan Infracore has recently decided to spin off its machine tools business sector and sell part of its stake in the spinoff, tentatively named Doosan Machine Tools Corp. Once the sale of Doosan Machine Tools Corp. is completed, Doosan Infracore will secure 500 billion won (US$441.5 million) for the sale of its stake and 1.5 trillion won (US$1.32 billion) for the sale of its management rights in cash.
According to investment banking industry sources on Oct. 25, Doosan Infracore changed the sale of Doosan Machine Tools Corp., which has been pushed ahead in private so far, to open bidding, and it will send an investment teaser letter to potential buyers this week. On Oct. 8, the company announced that it plans to spin off its machine tool business sector, establish Doosan Machine Tools Corp. at the end of Dec., and sell 49 percent of its stakes.
Industry watchers are also looking at the possibility of Doosan Infracore selling all its stakes, including management rights, instead of 49 percent of its stakes. An official from Doosan Infracore said, “Regarding the sale of Doosan Machine Tools Corp., the sale of the management rights is not decided yet.”
Doosan Machine Tools Corp. produces mainly “mother machines” as its major product, including machines to produce products in the automobile and information technology (IT) sectors. The company posted 1.32 trillion won (US$1.17 billion) in sales and 157.1 billion won (US$138.72 million) in operating profits last year. In the machine tool sector, it is one of the top two companies, along with Hyundai WIA.
Doosan Infracore is recently working to improve its financial structure. In June, the company sold Montabert, its French construction and quarrying equipment and attachments manufacturer, securing 135 billion won (US$119.21 million). In Aug., it decided to sell the stakes of its subsidiary of Doosan Infracore, Bobcat Holdings Co., to raise 670 billion won (US$591.61 million). When Doosan Infracore completes the sale of Doosan Machine Tools Corp. by the end of this year, it is expected to secure a liquidity of up to 2.3 trillion won (US$2.03 billion).
Meanwhile, the Doosan Group denied the rumor that it is improving the financial structure of Doosan Infracore as the preparation for the bidding to win a license to operate duty-free shops.