S. Korea's state bank withdraws from Daewoo Engineering sale
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South Korea's state-run Korea Development Bank (KDB) said Tuesday it will withdraw from its role as a main arranger for the sale of Daewoo Engineering & Construction Co. and consider providing financial support to its buyer.
"Considering various conditions including a controversy over interest conflicts, we decided to drop our role as a main arranger for the sale of Daewoo Engineering after close consultations with Daewoo's owner Kumho Asiana Group," the KDB said in a statement.
The KDB has served as one of the two arrangers for the sale since June, together with Tokyo-based Nomura Securities Co.
The bank said it is seriously mulling over providing Daewoo's buyer with financial support once a genuine, capable bidder is selected," the KDB also said.
"We could offer part of the takeover funds or provide funds necessary for capital investment after a bidder completes a takeover," KDB Chairman Min Euoo-sung said.
Local analysts expect the size of the fund is likely to be around 1 trillion won, or 867 million U.S. dollars.
On Monday, Kumho Asiana Group picked two foreign funds, Jabez Partners and TR America Consortium, as preferred bidders for a controlling stake in its construction unit, Daewoo Engineering.
Kumho Asiana, which has been facing liquidity squeeze amid a global financial downturn, is seeking to sell a 50 percent stake plus one share in Daewoo Engineering, at around about 3.3 trillion won (2.85 billion U.S. dollars).
Kumho Asiana Group bought a 72.11 percent stake in the builder in June 2006.
Shares of South Korea's third-largest builder closed at 13,150 won (11.37 U.S. dollar) on the main bourse, down 5.4 percent from the previous day.
