Restructuring Plan for Doosan Heavy to Be Finalized in Mid-May
Creditors of Doosan Heavy Industries & Construction will finalize a restructuring plan for the crisis-torn company in the middle of May. The company, a victim of the government’s ill-advised nuclear phase-out policy, has received 2.4 trillion won in liquidity support from state-run banks.
Doosan Group, the parent of Doosan Heavy Industries & Construction, has submitted to creditors a plan to raise 3 trillion won to normalize the operations of its troubled affiliate. Whether the plan includes sales of the group’s core affiliates, Doosan Infracore and Doosan Bobcat, remains to be seen.
The creditors, including Korea Development Bank (KDB) and the Export-Import Bank of Korea, will finalize the restructuring plan for Doosan Heavy Industries & Construction after conducting due diligence on the builder and Doosan Group. The due diligence is being carried out by Samil Accounting.
Doosan Group has put up for sale Doosan Solus, a blue-chip affiliate with a market capitalization of about 1 trillion won. The group will sell off the 61 percent stake in Doosan Solus held by the owner family and Doosan Corp., and pump the proceeds from the sale into Doosan Heavy Industries & Construction.
Doosan Group looks to raise more than 800 billion won from the sale of Doosan Solus as the value of the management right is high and the company has a bright future in light of the high growth potential of the secondary battery material industry.
But the equity sale will not be enough for Doosan Group to raise 3 trillion won. For this reason, watchers say that the group may have to sell off other key affiliates such as Doosan Infracore and Bobcat.
Doosan Bobcat currently has a market capitalization of approximately 2.32 trillion won, and Doosan Infracore holds a 51 percent stake in it. As the value of Doosan Bobcat is estimated at more than 1.5 trillion won, its sale will help Doosan Group raise enough money to normalize Doosan Heavy Industries & Construction.
But Doosan Infracore and Doosan Bobcat are Doosan Group’s main pillars so the group will not give them up. For this reason, the creditors and Doosan Group may have a tug-of-war over the sale of Doosan Bobcat.