KDB to stick to plan for purchase of Daewoo Engineering

SEOUL, Jan. 22 (Yonhap) -- The creditor bank of Daewoo Engineering & Construction Co. plans to stick to its original plan to buy the troubled builder in a bid to help the firm's parent group avert a liquidity crisis, the head of Korea Development Bank (KDB) said Friday.

A private equity fund led by KDB is seeking to buy a 50 percent stake plus one
share in the construction firm for 18,000 won (US$15.7) per share as part of
efforts to restructure cash-strapped Kumho Asiana Group.
The builder's financial investors oppose the transfer of their stakes at the
offered price, however, suggesting they would invest around 2.2 trillion won in
Kumho Industrial Co., the biggest shareholder of Daewoo Engineering, to secure
managerial rights to the firm.
"The restructuring of Kumho Group should be pushed forward swiftly... As the
investment plan suggested by financial investors does not have sufficient
details, we cannot wait blindly," said Min Euoo-sung, president of KDB Financial
Group.
Kumho Asiana has been riddled with debt after it bought a 72.1 percent stake in
Daewoo Engineering in 2006 for 6.4 trillion won, a deal mostly funded by the
financial investors.
Kumho faced a cash call worth around 4 trillion won from the investors, who
exercised their rights to sell shares in Daewoo Engineering back to the group on
Dec. 31 at above-market prices. Kumho Industrial must repay the amount by June
15.
sooyeon@yna.co.kr
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