Hanwha to sue state bank over seized deal deposit

SEOUL, Jan. 23 (Yonhap) -- South Korea's Hanwha Group said Friday it plans to
file a lawsuit to reclaim a deposit seized by a state-run bank after the group's
aborted deal to buy a shipbuilder.
The Korea Development Bank (KDB) on Thursday nixed the deal to sell Daewoo
Shipbuilding & Marine Engineering Co. to the family-controlled conglomerate. KDB,
the shipbuilder's main creditor, said it will seize the 300 billion won (US$220
million) deposit Hanwha put up late last year when it was picked as the prime
bidder.
"We will take every necessary action to protect our shareholders' value and seek
to recover the deposit as the deal was scrapped," Hanwha Corp., the group's de
facto holding company, said in a regulatory filing.
A Hanwha Corp. official said the group is considering take the case to court to
recover the deposit.
Hanwha signed a preliminary deal with KDB on Nov. 14 to buy a 50.4 percent stake
in the world's third-largest shipyard for a reported 6.3 trillion won 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 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.
Hanwha wanted to cut the price tag as shares of Daewoo Shipbuilding had halved
from six months earlier, hit by the global financial turmoil and concerns about a
decline in shipbuilding orders.
The group also claimed that without due diligence on Daewoo Shipbuilding, the
deal is not fair for it.
Daewoo Shipbuilding ended a debt rescheduling program in August 2001 after being
placed under the program in August 1999, after its parent Daewoo Group collapsed
under heavy debt.
sam@yna.co.kr
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