Financial authorities have begun an earnest push to sell Daewoo Shipbuilding & Marine Engineering, with the aim of retrieving the taxpayers’ money injected into the shipbuilder by the second half of 2014.
The scheduled auction plan was mapped out by the Korea Development Bank and the Financial Services Commission, the two main shareholders of DSME.
In an initial step, the FSC ― through its executive arm, the Public Fund Oversight Committee ― reduced its stake in the company from 17.15 percent to 12.15 percent by selling off 9.57 million shares through a block deal on the Korea Exchange last week.
As the next step, market insiders say, the FSC is seeking a package deal through which it will dispose of most of its remaining 12.15 stake along with the 31.46 percent stake held by the Daewoo Shipbuilding’s biggest shareholder KDB.
The sale package guarantees higher bidding prices for the authorities as the dominant stake means a simultaneous takeover of the management right for an acquirer.
“Considering the regulator FSC’s recent comments on the necessity of fast retrieval of taxpayers’ money, there is a high possibility that the authorities will put up the company for auction during the first quarter of 2014,” said an M&A-specialized analyst.
While the National Pension Service is the third-largest shareholder with an 8 percent stake, retail investors hold about a 43 percent stake in the company.
Russia’s state-controlled oil producer Rosneft was rumored to have recently expressed its interest in Daewoo Shipbuilding.
Some say that Rosneft is contacting with Korea’s government officials over the coming bidding after it signed a memorandum of understanding with Daewoo Shipbuilding on strategic business coordination during the Korea-Russia summit earlier this month.
According to a Russian news report, Rosneft has formed a consortium with Russia’s banking giant Gazprom and state-run shipper Sovcomflot.
Rosneft pumps an average of 4.2 million barrels per day, accounting for 5 percent of the world’s total oil production, with yearly sales reaching $160 billion (about 175 trillion won).
FSC officials share the view that a successful sale ― involving the retrieval of public funds via desirable bidding prices ― of DSME depends upon a recovery in the sagging shipbuilding industry and global economy.
The shipbuilding industry has suffered a sharp drop in orders in overseas markets in the wake of the global economic slowdown over the past few years.
However, the financial investment industry has started to paint a rosier picture. Daishin Securities predicted that the industry had a better year in 2013 as global shipbuilding financing started to recover.
“The oversupply issue is likely to subside from this year,” said a Daishin Securities analyst.
According to a report by U.K.-based Clarkson’s Research, a late surge in shipbuilding orders helped cement the Korean industry’s global lead in volume since late 2012.
By Kim Yon-se (
kys@heraldcorp.com)
