Doosan Group to secure 780 bln won through sale of affiliates

By Nam Kwang-shik
SEOUL, June 3 (Yonhap) -- South Korea's Doosan Group said Wednesday that it has
decided to raise 780 billion won (US$630 million) by selling a 20.54-percent
stake in Korea Aerospace Industries Ltd. and its entire stake in three affiliates
to ease a credit crunch.
The group has suffered a cash shortage since Doosan Infracore International
(DII), the U.S. unit of its affiliate Doosan Infracore Co., acquired U.S.-based
construction equipment maker Bobcat for $4.9 billion in November 2007. Doosan
Infracore is South Korea's largest construction-equipment maker.
The three other companies are bottle-cap maker Samhwa Crown & Closure Co.,
defense equipment manufacturer Doosan DST Co. and franchise restaurant operator
SRS Korea Co.
To implement the decision, the group will set up DIP Holdings Co., which will buy
a 51-percent stake in the three affiliates in order to maintain managerial rights
over the companies.
A venture established by two private equity funds will purchase the remaining
49-percent stake in each affiliate, Doosan said in a regulatory filing.
As to the group's 20.54-percent stake in Korea Aerospace Industries, the
country's leading aircraft maker, DIP holdings will buy 51 percent of the stake,
with the venture to acquire the remainder.
"We will improve the financial structure of Doosan Infracore International with
the proceeds from the stake sale," Lee Sang-ha, a Doosan Infracore executive
director, told reporters.
Meanwhile, Doosan Infracore said in a separate regulatory filing that it has
decided to join a new share offering by DII by purchasing 4,874 shares of the
unit for 230 billion won and 5,006 shares of its Irish unit Doosan Holdings
Europe Ltd. for 250 billion won as part of efforts to improve their financial
health.
ksnam@yna.co.kr
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