A Builder in Financial Trouble
Doosan Heavy Industries & Construction will secure a 100 percent stake in Doosan Engineering and Construction (E&C) and make the troubled construction company an affiliate. Once the stock swap is completed, Doosan E&C will be delisted from the stock market.
Doosan Heavy Industries & Construction announced on Dec. 12 that it has decided to secure all remaining shares of Doosan E&C. It currently has an 89.74 percent stake in the financially troubled builder.
The company is planning to secure Doosan E&C shares by allocating 0.2480895 shares of Doosan Heavy Industries & Construction per Doosan E&C share to shareholders who hold approximately 10 percent of Doosan E&C's shares. The exchange price of Doosan Heavy Industries & Construction is 5,365 won and that of Doosan E&C's, 1,331 won. If the approximately nine million Doosan E&C shares to be additionally secured is evaluated at about 5,000 won per share, the acquisition cost will total about 40 billion won.
However, since it is a stock swap, no actual funds will be involved. Shareholders opposing the stock stop can file opposition from Dec. 27 to Jan. 10 of 2020. The general shareholders' meeting is slated to take place on Feb. 7, 2020.
After the completion of the stock swap, Doosan E&C, which was listed on the stock market in 1996, will disappear from it in 23 years. Doosan Group has been participating in capital increases of Doosan E&C to reduce its debt ratio.
Market watchers said Doosan Heavy Industries & Construction decided to take Doosan E&C off the stock market as Doosan E&C was unable to make a quick decision due to the various interests of minority shareholders.