KDB set to decide on shipbuilder sale

SEOUL, Jan. 21 (Yonhap) -- State-run Korea Development Bank (KDB) said Wednesday
that it will make an announcement Thursday on whether to salvage a deal on the
sale of a major shipyard to Hanwha Group amid growing speculation it may abort
what could be the largest acquisition in the shipbuilding sector.

Hanwha signed a preliminary deal with KDB on Nov. 14 to buy a 50.4-percent stake
in Daewoo Shipbuilding & Marine Engineering Co. without a due diligence due to
opposition from the shipbuilder's union.
But a self-imposed year-end deadline to seal the deal was delayed by one month as
Hanwha demanded it be allowed to pay the 6.3 trillion won (US$4.56 billion) for
the stake in installments, citing difficulties in raising funds amid a credit
crunch.
KDB last week urged Hanwha to come up with a detailed and realistic plan for
funding the acquisition and threatened to scrap the deal if Hanwha fails to
finalize it by the end of the month.
The lender's board of directors is scheduled to hold a meeting later in the day
to decide on the deal, according to KDB spokesman Sung Joo-young.
"There has been no progress made on the deal," Sung said, adding the lender will
announce the board of director's decision on Thursday.
There is growing speculation that talks on the sale are likely to break down as
KDB is unlikely to revise terms of the sale.
KDB proposed to set up a private equity fund with institutional investors to buy
assets offered by Hanwha Group instead of accepting Hanwha's demand for payment
in tranches. Hanwha put down a 300 billion won deposit to make good on its
promise to complete the Daewoo deal.
sam@yna.co.kr
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