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Doosan Heavy Sells Stakes in Doosan Engine for 82.2 Billion Won
For Financial Improvement
Doosan Heavy Sells Stakes in Doosan Engine for 82.2 Billion Won
  • By Jung Min-hee
  • March 14, 2018, 02:30
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Doosan Heavy Industries & Construction is going to sell its entire stake of 42.66 percent in Doosan Engine Co. for 82.2 billion won (US$77.18 million).
Doosan Heavy Industries & Construction is going to sell its entire stake of 42.66 percent in Doosan Engine Co. for 82.2 billion won (US$77.18 million).

 

Doosan Heavy Industries & Construction Co., the nation’s top power equipment maker, announced on March 13 that it has signed an agreement with a consortium consisting of two Korean private equity funds – Socius Advisors and Well to Sea Investment – to sell its entire stake of 42.66 percent in Doosan Engine Co. for 82.2 billion won (US$77.18 million).

For the latest sale, Doosan assets owned by Doosan Engine will be merged with Doosan Heavy and other businesses will be sold to the consortium.

In short, Doosan Heavy will only sell a division that produces large engines for ships. Doosan Engine’s other assets will be merged with Doosan Heavy.

The going value of Doosan Engine’s remaining businesses stands at 342.3 billion won (US$321.41 million) and the value of the whole stake, excluding 149.6 billion won (US$140.47 million) of net loans to be received by the buyer, amounts to 192.7 billion won (US$180.94 million). The amount of the sale for Doosan Heavy’s stake of 42.66 percent is 82.2 billion won (US$77.18 million).

Doosan Engine’s shareholders will obtain new Doosan Heavy shares in return for the merger with Doosan Heavy in the investment sector as well as stocks in the business sector after the spin-off from Doosan Engine.

Doosan Heavy will use the money from the sale to pay off its loans. The company is also expected to achieve additional financial improvement in the future based on new assets acquired. The two companies are planning to complete the sale by the end of the first half of the year after proceeding with the merger procedure.

Meanwhile, Doosan Engine, a large ship engine manufacturer and seller established in 1983, ranks second in terms of global market share. The company posted 768.9 billion won (US$721.97 million) in sales and 13.5 billion won (US$12.68 million) in operating profit last year.