KDB to speed up stake sales this year

 The state-run Korea Development Bank said it wants to speed up the sales of its stakes in non-financial companies this year to put more focus on its own business and improve efficiency.

Earlier this year, the policy bank had announced its plan to sell off stakes in 46 companies within this year, among the 132 non-financial companies that KDB wants to divest by 2018. The 132 are those in which KDB has a 15 percent or higher equity stake, or those in which the bank has secured a stake of 5 percent or more through debt-to-equity swaps.

“Stake sales of Kukje Machinery Co. and Osung LST Co. are the most urgent among them,” KDB spokesperson Cho Seong-wook said.

“Selling stakes in 46 companies within 52 weeks is really tight. We have to sell at least one per week,” he said.

Cho declined to reveal the full list of the 46 companies in which it plans to sell a stake, citing the possible impact on deal negotiations.

Kukje Machinery, a manufacturer of machinery in agriculture and forestry, is a subsidiary of Dongkuk Steel Mill which has a controlling 50.82 percent stake. The rest is held by creditors including KDB.

Osung LST, a KOSDAQ-listed maker of equipment for LCD testing and semiconductor manufacturing, was put up for sale on Wednesday by creditors that have a combined 46 percent stake.

Since massive losses were revealed at the shipbuilder Daewoo Shipbuilding and Marine Engineering last year, its largest stakeholder KDB has been under mounting pressure from the government to sell off non-financial firms.

As part of the move, creditors including KDB agreed to sell their combined 46.14 percent stake in Korea’s largest cement-maker, Ssangyong Cement Industrial, for 883.7 billion won to private equity firm Hahn & Co. in April.

KDB also has large stakes in the nation’s sole aircraft-maker Korea Aerospace Industries, with 26.75 percent of shares, and automaker GM Korea with 17.02 percent.

However, industry watchers reckon it will be difficult for the bank to sell its stakes in KAI or GM Korea sometime soon due to the companies’ distinct characteristics. KAI is a defense company in which the government wants to keep the management rights. As for GM Korea, KDB can only sell its stake in the Korean unit to GM until 2017 under the 2002 contract between KDB and GM.

Separately, KDB is seeking a buyer for its 99.92 percent-owned KDB Capital, an equipment leasing and venture capital firm.

In the preliminary bidding in March, U.S. private equity Carlyle, a private equity firm set up by SK Securities and a non-financial company based in Korea were selected as the three chosen suitors.

The final bidding is scheduled for May 24.

By Kim Yoon-mi (yoonmi@heraldcorp.com)