Additional Asset Sales Needed
Doosan Group will sell its affiliate Doosan Solus, a producer of electric vehicle battery materials to Skylake Investment, a private equity fund established by former Information and Communication Minister Chin Dae-je. The sale price has not been disclosed but is estimated at 700 billion won.
Doosan Corp. signed a memorandum of understanding with Skylake Investment on July 7 for the sale of Doosan Solus. Doosan Solus is 61 percent owned by Doosan Group., with Doosan Corp. owning 17 percent, and special interest individuals including Doosan Group chairman Park Jung-won the remaining 44 percent. The group is likely to sell off the entire 61 percent stake.
Doosan Solus's market capitalization stood at 1.27 trillion won as of July 7.
Skylake has shown interest in taking over Doosan Solus since early 2020. It conducted due diligence on the company’s plant in Hungary. The investment company was attracted by the company’s growth potential as the global electric vehicle battery market is expected to grow fast in the coming years. Copper foil, one of Doosan Solus's flagship products, is growing rapidly as demand for electric vehicle batteries increases.
In 2019, Doosan Solus posted 233 billion won in sales and 38 billion won in operating profit. It has set up a roadmap to increase its annual production capacity of battery foil to 75,000 tons by 2025.
Doosan Group has secured more than one trillion won from the sale of its affiliates and assets, including Doosan Solus. In June, it sold off Club Mow CC to the Hana Finance-Moa Miraedo Consortium for 180 billion won. It is also in talks with Maston Investment Management over the sale of Doosan Tower, which is valued at 600 billion won to 800 billion won. However, Doosan Tower is secured with 400 billion won, so the actual amount of funds that Doosan Group will be able to take is expected to be around 200 billion won.
Doosan Group announced plans to secure one trillion won through a paid-in capital increase of Doosan Heavy Industries & Construction Co. (DHIC) However, even including this, the proceeds from asset sales still fall short of the three trillion won the group has promised to raise on its own to keep DHIC afloat. This is why some predict that Doosan Group will have no choice but to sell off Doosan Infracore as well. Doosan Infracore has a market capitalization of 1.36 trillion won, so DHIC’s 36.27 percent stake in it is valued at about 489 billion won. Doosan Group will be able to receive between 600 billion won and 800 billion won with the addition of a premium for transferring management rights.