Local builder makes solo bid for Kumho Industrial

Hoban Construction Co., a mid-sized local builder, made a solo final bid for a controlling stake in Kumho Industrial Co., the de facto holding firm of Kumho Asiana Group that controls Asiana Airlines Inc., the country's No. 2 air carrier.
  

According to Korea Development Bank, the lead manager of the stake sale, only Hoban Construction offered its final bid for the 57.5 percent stake estimated at 500 billion won ($468 million). Other details, including its bid price, were not disclosed.
  

In February, five prospective buyers -- four private equity firms and Hoban Construction -- offered letters of intent to take over Kumho Industrial, the group's construction arm.
  

After further evaluating the bid, creditor banks will decide within this week whether to select Hoban Construction as the preferred bidder, KDB said.
  

In January, KDB and other creditor banks announced the sale of the stake, or about 19.55 million shares, in Kumho Industrial, which they had acquired through a debt-for-equity swap. The builder was lifted from a five-year debt workout program a month earlier.
  

The builder had been struggling from mounting debt amid adverse property market conditions. Its parent group lapsed into a liquidity crunch in 2006 after buying a 72.1 percent stake in Daewoo Engineering & Construction Co. for 6.4 trillion won.  
  

Market watchers said the bidders are believed to have offered as much as 1 trillion won in an effort to gain the management right to some of the more profitable Kumho subsidiaries.
  

Shares of Kumho Industrial closed up 1.56 percent at 22,850 won on the Seoul bourse.
  

Kumho Industrial is the largest shareholder of Asiana Airlines with a 30.08 percent stake. Taking over the construction firm also ensures management control of budget carrier Air Busan Co. and four other Kumho affiliates.
  

Park Sam-koo, president of Kumho Asiana Group, is also a likely contender in the stake sale as he seeks to piece back together his former business group with the purchase of the builder.
  

The 70-year-old Park has the right of first refusal in the bid, which allows him to either buy a 50 percent stake plus one share or not enter the bid at all, depending on how much he needs to pay to outbid rivals. (Yonhap)